Globalization has opened platform for business organizations for enhancing profitability and financial revenues that are earned by an organization (Xu and Bu, 2014). Present report is based on grocery giant Tesco that offers superior quality goods at affordable price to the buyers. Use of business information system for supporting the activities of the firm has been mentioned. Along with this various methods that could be used acquiring new business information system has been mentioned. More over four main areas in which BIS can be implemented has been identified. In addition to that various benefits that have been taken by Tesco by implementing Customer relationship management system have been described.
Use of business information system in Tesco
Tesco is a well-known progressive business retailing firm that offers huge success and growth opportunity for companies. Wide variety of products are offered by it to large number of consumers and it helps for attracting large number of consumers towards selling the products that are offered. Advancement in technology has helped for making improvements in practices and procedures that are being used in organizations for carrying out their operational functions. Business information system is used in the company so that required practices should be carried out effectively (Zikmund and Griffin, 2013).
Tesco can make use of BIS for supporting its activities in following areas:-
Supply chain management is active management of supply chain activities so that consumer values could be maximized and sustainable competitive advantage could be achieved. Various activities that are covered under supply chain includes development, sourcing, production, and logistics. Business information system is being used in Tesco for making improvements in this areas:-
Technology is used at rapid rate and it is making the organization dynamic and progressive. Business information system is used as a tool for collecting, processing, storing, distributing and using the information system in the company. It aids for taking strategic decisions for business and overall activities of the entity is improved through this. All the three levels of management makes use of these systems for performing their operating functions. In accordance with this, it is vital that proper information should be made available with the top management of the firm so that they could take strategic decisions for the organization. Tesco’s management has implemented the system so that proper analysis, processing and collection of data and information should be made and decisions for the company could be taken.
Internal and external is two types of data that is being collected in the firm and all the required decisions of the company are taken on the basis of this. External data and facts are collected through survey and questionnaire method (Davenport, 2013). It aids for collecting necessary data and details from the buyers so that required objectives of the company could be achieved. Internal data and knowledge is collected from the operational level and line managers are made accountable for collecting necessary details so that required activities should be performed successfully.
There is two type of information system that is being used in the firm and it comprise of general vs. specialized information system. Tools which are used includes database management system (DBMS) and electronic spreadsheet. Both the tools are used for systematically carrying out the analysis and processing of data and information. On the other hand there are some specific techniques that are being used for carrying out the special processes in the firm and it includes Enterprise resource planning (ERP) and it is an information system that is being used for integrating external and internal information that is being used in the firm.
One more system that is being used in the firm is Geographic information system in which management and analysis of all the types of details and information is performed. One more system that is being used in the firm is expert system that is being used by management for resolving the issues that is being faced. Critical and complex issues that are being faced in the company are resolved and effective strategies are formed for performing the necessary activities of the enterprise (Galliers and Leidner, 2014). Expert system is one of the most effective system that is being used in the company and it aids for resolving the issues that is being faced in the company. Large amount of data and information is collected in the firm and necessary and effective decisions are taken by analysing the data and information that is being collected in the company.
Different methods that are used in Tesco for acquiring new business information system.
Business information system of Tesco has been designed for appropriately analysing the information that is being collected in the firm. Along with this, there are different types of tools and techniques that management of company is using for carrying out their practices and procedures. In the same way, typical components of information system includes hardware and software and in hardware tools that are being used comprise processors, keyboards, printers and monitors (Österle, 2013).
Bespoke development - One major method that is been used in Tesco for acquiring software system is through bespoke development. This system is a unique system that has been designed for meeting the specific requirement of consumers. This type of bespoke development can be done by making software within the company itself or it can be outsources to outside the company.
Major advantage of Bespoke development are as described:-
Tesco will get the exact software/ systems that are required in company.
Attributes and features that will be needed for specific business needs will be added in the system.
Disadvantages of this approaches are:-
It requires a long time for developing such a system and it cost the company for designing such a system.
It is required that experts should be hired such as business analyst, testers and programmers.
Off-the-self - Second method that could be used in the company is off-the-self. It is the software that is easily available in market and it is ready made. An example of such systems include Microsoft office.
Some of the benefits of this system are:
Cheaper: - Development cost for this system is lower and this cost is spread among large number of users due to which it is cheaper.
Reduces training cost: - It is a commonly used system and so it is not required for hiring specialist and experts.
Available immediately: - The development work has already been done and due to that it is only required that software should be implemented and used immediately.
Upgrades: - Up gradation of this software is available at free or at a reduced cost.
Disadvantages of this system are:-
Compromise: - It may be required that compromise should be done on the requirement of software.
Over complication: - software might contain some functions that are not needed and due to that functionality of the software gets affected.
Likewise, software tools that are being used for organizing, processing and systematically analysing the data and information. Databases in which information systems works with information, data and facts is included. Networks in which various elements are connected with each other and this is used as various processes are used for connecting all the individual with each other. Various procedures that are being used describes about how specific data is processed and analysed for performing the required activities and processes in the organization.
Various hierarchy levels are using the information system for performing various activities in firm and it has helped for making positive improvements in processes and procedure that are being used in the company (Wild, Wild and Han, 2014). Software are used for carrying out the analysis and processing of data and information that is being used in the firm. Raw information and data is processed so that meaningful information can be generated and quick and effective decisions should be taken for business. Data base management system is used in the firm with objective to carry out processing and analysis of details and information that has been collected. DBMS is a general purpose information software that is being used in the firm so that required activities in the business should be performed successfully (Shapiro and Varian, 2013).
Other than this enterprise resource planning tool (ERP) is used as a specialized information system and under this external and internal data is being used for processing the details and information that is being used in the company. Integration of all the internal and external information is done across the organization. With this, one more innovative system that is being used comprise GIS which is also known as geographic information system. Different types of geographical data is collected and analysed through this and it supports for systematically evaluating and assessing the data and information. Tesco company's management also makes use of expert systems so that complex and critical problems that are being solved in the company (Tao and Li, 2014). All are the major information system that are being used in the firm for performing the necessary functions successfully. All the methods, techniques and tools that are being used in the company helps for managing the data and details that are being collected. All the decisions for the company are taken successfully by making use of these techniques.
Four main areas that could be used for implementing new Business information system.
There are various areas in which management of the company has implemented the new information system and it has helped for performing the required activities of the business successfully. All the three level of management in the firm makes use of these systems and it helps for performing the required activities of the business successfully. Top management people makes use of these opportunity so that effective strategies and decisions should be taken for the company. It is vital that all the necessary functions of the business should be performed effectively (Bryman and Bell, 2015). More than that, office automation has been done and all the processes. There are four main areas where Tesco can implement the business information system in four distinct areas and it comprise of taking tactical level decisions in which managers are provided with the stock cards and they are provided with the sales figures and that could be used by them in taking decision for the organization.
Four level pyramid level discusses about four main areas that could be implemented successfully are as described.
Four main areas where BIS system could be implemented are as follows:-
Transaction processing system: - This is an operational level system which is at bottom of the pyramid. It is operated by front line staff and shop floor level workers. It provides important data that is being required for supporting the operations. This data is collected through automated and semi-automated tracking systems through basic transactions.
Management information systems: - Major role of management support system is to support relatively structured decisions. It is used by inflexible and have vary analytical capacity. It is used by lower and middle level management and it aids for enhancing efficiency. Middle level managers makes use of this system for ensuring smooth running of the organization.
Decision support system: - It is a knowledge based system which is used by top level managers and it is used for analysing structured information system and it allows managers for projecting the potential impact of their decision on the business. This system has analytical or modelling capacity and it supports semi structured decisions.
Executive information system: - This system is used at the senior most management level and it is concerned with predicting future for the organization. It makes use of external and internal data sources for supporting unstructured decisions at higher level.
For the company it is required that effective measures should be taken so that sales performance of the company can be improved. In addition to that business information system can be implemented for selling the products of the company through online medium. Consumers can be attracted for selling the products through online mode (Fleischmann, Schmidt and Brger, 2014). This method can also be used for managing the inventory so that all the supply chain activities can be performed successfully. Delivery and supply of the material can be made ensured through implementing the system successfully. Company has also taken initiatives for launching GPS system for drivers and it aids in ensuring that all the required material can be delivered on due time (Galegher, Kraut and Egido, 2014).
Tesco club card system has also been launched by the company and through this different components are used for collecting, processing, storing and analysing the data and information that is being used by the company. Through Tesco club-cards information and details are collected about consumers and it aids for making effective strategies that could be used by the companies for carrying out the systems and procedures effectively.
Different types of information such as address, name, personal details, information about sales can be collected and on the basis of that strategies can be formed for performing the business functions effectively (Wirtz, Pistoia and Göttel, 2016). By making use of club card system loyalty of consumers can also be gained by making use of this approach. Three major criteria that could be used for evaluating the loyalty of buyers includes frequency and values.
Behaviour of shoppers can be measured through this and on the basis of that measures can be taken for improving the sales performance of the business. Inventory management activities can also be performed and control of stock can be done through this. Stocks can also be managed and on the basis of that all the essential supply chain activities can be performed successfully. GPS tracking system can be used in the company and through this tracking of orders placed by consumers can be done. Orders can be placed at doorstep by making use of this approach and on the basis of that better services can be provided to buyers. External environmental changes that are happening in outside world have given impact on the various activities that are being performed by the business (Ward, Hancock and Macrae, 2014). With this, business information system can be used for assessing the requirement and needs of buyers and on the basis of that actions are taken for making strategies for the organization.
Benefits that are reaped by Tesco through Customer relationship management
Customer relationship management system can be used in company for developing better and effective client relationship and improving the ability for keeping the buyers highly satisfied. Tesco is offering diverse range of products to the consumers of business and large number of people are getting benefited through this. A loyal and satisfied consumer is the biggest asset for company. There are various benefits that could be reaped by company by making use of this approach. Some of its benefits are:
Developing better relationship with the consumers: - Better client relationship can be developed with the buyers and on the basis of that effective relationships can be developed with the consumers (Whitmore, Agarwal and Da Xu, 2015). Deeper relationships can be developed with the business clients and all the products and services can be designed and developed as per the needs and requirement of buyers.
Resolving issues faced by clients: - Issues and problems being faced by clients of business can be resolved successfully. Client's need and requirements can be identified and on the basis of that, better products and services can be delivered to the buyers (DaSilva and Trkman, 2014).
Customer retention: - CRM system helps in understanding the consumers and data about consumers can be collected as well. Prediction can be made about types of products that are required by the consumers.
Improving customer service management and customer services: - Organization has become more capable for rendering better services to the consumers. Team collaboration can be improved and it supports in reaping better and effective benefits of CRM. CRM software can be implemented successfully and on the basis of that, measures can be taken for improving the services that are being used in firm. Better customer relationship can be developed with the clients of business and through this, efficiency of company can be improved for serving clients of business (Xu and Bu, 2014). Enhancing profitability: - Record of customer interaction can be made with the business clients and it will help in making positive improvements in services and products that are being provided by company. Better customer satisfaction will help in making the employees satisfied so that problems faced by clients can be resolved. Existing revenue and profitability of company can be improved as satisfied consumers are likely to purchase products that are being offered by the firm (Zikmund and Griffin, 2013).
Cost for implementing CRM system is high and benefits that are being reaped are high. By implementing the system, overall cost for carrying out the operational processes can be improved. Retention and attrition rate can be reduced as well as better and effective services can be delivered to the clients. Communication can be enhanced and smooth flow of data and information can be ensured through CRM activities that are being performed in company.
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Potential benefits and challenges for using internet for business.
Tesco is a leading grocery store of UK that offers quality services to the buyers and superior quality odds are being offered by the firm. Recently company has launched Online home delivery business in which consumers are provided with the options for selecting the products and ordering through website of the company. Online services that are being offered by the retailing firm aids for attracting large number of buyers for selling the goods and diverse range of services that are being offered by the company.
Online grocery shopping services that are being offered by the firm are one of the most effective initiative and platform that has been launched by the firm. Wide variety of goods such as Home-ware, electrical, clothing, Groceries and Clubcards are offered through the online platform. There are many customers of the entity have difficulty in accessing to the physical stores and online retailing services that are offered by the firm supports for selling goods to a larger consumer case. Using internet for business has various added advantage and it has helped for improving the various processes that are being used in the firm.
Digital technology provides an effective medium for selling the goods to consumers that are located in far geographical areas. With regard to this use of internet helps for making the communication process faster and flow of data and information can be made more smooth and effective. Team collaboration can be made more effective as the data and information that are provided to buyers are made faster and through this all the practices and procedures can be made better (Davenport, 2013).
Use of internet also aids for making consumers aware about diverse range of goods and discounted schemes that are being offered by the firm. E-mails and business letters can be sent to the consumers and they are made aware about the various products and discounted schemes on them. It aids for selling large amount of commodities and through this financial revenues and profitability earned by the company can be enhanced. Time required for carrying out the operational process can be reduced and by making use of internet all the departmental processes can be made digitized (Galliers and Leidner, 2014). Internet can be used for taking orders from the buyers and through this home delivery of goods can be done. Tracking of orders and delivery of services can be done at a faster rate and clients can be delivered better values for the money invested by them.
Challenges faced for using internet are:-
Security and protection issue: - Various security and privacy issues are faced while making use of internet. Fraudulent use of credit cards and computer virus and spam is one most security issue. Phishing is also one major security issue that is being faced by the company in which E-mail messages look like they have come from an official source but links from the message goes to a fake website.
Training cost :- It is required that staff members should be trained for effectively making use of internet and for this proper training needs to be provided to them. Staff member’s needs to be trained on new business information system and business processes that needs to be changed.
Internet is also being used for taking reviews and responses from buyers about the services that are being given to them. On the basis of that weak performances of the retailing firm can be identified and measures can be taken for making positive and effective improvements can be made in them (Shapiro and Varian, 2013). Internet can also be used for resolving the problems and issues that are being faced by clients of business. People who have difficulty in accessing the goods and services through physical stores gets better advantage for ordering through online delivery sites and purchasing of products can be done through this. Large consumer base can be sold goods that are delivered by the firm and by this profitability and financial revenues of the company can be enhanced.
Summing up the present report it can be concluded that business information system can be used in an enterprise for carrying out the analysis of data and information in successful manner. This technique can be used for collecting, processing, distributing and analysing the data and information. Better and effective decisions can be taken and on the basis of that strategies can be formed. DBMS is an effective tool can be used for managing the data and information in the firm. Processing the data becomes easier and top management, middle management and lower level management can take strategic decisions for the enterprise. Business activities can be supported and all the necessary functional activities can be performed in planned and systematic way. There are various areas in which this system can be implemented and inventory management is one such area. Stocks and inventory can be managed in better way and supply chain activities can be performed successfully. There are various advantages that could be reaped by making use of internet in the firm.
Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.
DaSilva, C.M. and Trkman, P., 2014. Business model: What it is and what it is not. Long range planning.
Davenport, T.H., 2013. Process innovation: reengineering work through information technology. Harvard Business Press.
Fleischmann, A., Schmidt, W. and Brger, E., 2014. Subject-oriented business process management. Springer Publishing Company, Incorporated.
Galegher, J., Kraut, R.E. and Egido, C., 2014. Intellectual teamwork: Social and technological foundations of cooperative work. Psychology Press.
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.
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