Tesco's Information Systems
Table of Contents
Introduction: 2
Part A 7
Tesco's functional areas 7
Finance 7
Human resources 8
Marketing 9
Customer service 9
Human Resources 10
Contributions functional areas to Tesco 11
Finance 11
Human Resources and administration 11
Marketing and sales 12
Part B 15
Functional areas of Tesco 15
Human resources 15
Finance 16
Marketing 16
Administration Department 17
Part C 18
Information systems in Tesco 18
Hierarchy of management 19
Functional areas of Tesco 19
Part D 20
Scenario outline 20
Detail scenario 20
Information processing tools and methods used by Tesco 22
Difficulty with current method of information processing 23
Alternative tools required for resolving issue 23
Alternative method 24
Part E 25
Effectiveness of using alternative tools 25
Effectiveness of using alternative methods 26
Bibliography 27
References 27
Information systems - Tesco
Introduction:
For this assignment I am required to do research and write a report on the information systems of a specific business of my choice, from this business I will get the relevant information about information systems.
I will use my initiative in obtaining the information for the assignment. The business that I have chosen for this assignment is 'Tesco PLC' and the information that I collect for this assignment will be from various forms of desk and field research.
Tesco is a international supermarket retailer and 2nd largest in the world following Wal-Mart at number 1 originating from USA, Tesco is a mainly known for selling general groceries but Tesco is also has a large non-food range for example banking and insurance, clothing, mobile phone shop, entertainment and books as well as other household equipment and extras.
This assignment consist of 5 parts, I will start with 'Part A' this specifies the assignment agenda, introduction to the business (Tesco), business products and services, key facts and information as well as a list information systems used by Tesco PLC.
Assignment Agenda
* Identify information needs within different functional areas of an organisation
* Compare a range of information systems
* Examine the tools available to organisations for information processing
* Evaluate the information systems within an organisation.
Introduction to Tesco
Tesco PLC is a global grocery and general merchandising retailer headquartered in Cheshunt, United Kingdom. Tesco is the third-largest retailer in the world measured by revenues (after Wal-Mart and Carrefour) and the second-largest measured by profits after Wal-Mart. Tesco has stores in 14 countries across Asia, Europe and North America and is the grocery market leader in the UK (where it has a market share of above 30%).
Jack Cohen the founder of Tesco, began to sell groceries from a stall in the East End of London, his first day's profit was £1 and sales £4. Jack Cohen opened his first Tesco store in Burnt Oak, Edgware, North London in the 1929 and Tesco became a private limited in 1932 and from then Tesco has grown very rapidly and never stopped, Tesco became from a mortar to a mortar and clicks organisation in 2000.
Tesco - Mission Statement
"To create value for customers to earn their lifetime loyalty"
No one tries harder for customers:
* Understand customers.
* Be first to meet their needs.
* Act responsibly for our communities.
(Source: http://www.tescoplc.com/about-tesco/our-values/)
Products / Services of Tesco
Tesco offers a very wide range from products starting from groceries, furniture and kitchen, clothing and jewellery, phone shop, entertainment and books, sports and leisure, and many more at www.tesco.com
The following companies are the major competitors of Tesco PLC:
* ASDA Group Limited
* BP Plc
* Carrefour S.A.
* ExxonMobil Corporation
* The Big Food Group Plc
* J Sainsbury plc
* Marks and Spencer Group plc
* Royal Dutch/Shell Group
* Safeway Inc.
* Safeway plc
* Somerfield
* SPAR Handels-Aktiengesellschaft
* The Boots Group PLC
* Wm Morrison Supermarkets PLC
* Booker Cash & Carry Limited
* ALDI Group
* The Carphone Warehouse Group PLC
* John Lewis Partnership plc
http://people.exeter.ac.uk/wl203/BEAM011/Materials/Lecture%204/TESCO%20Company%20Profile.pdf
Key facts about Tesco
* Founded in 1919 (East London)
* Founder: Jack Cohen
* Global work force
Tesco has around 472,000 employees worldwide shared over 14 countries. (See reference: 2)
* Number of stores
Tesco has over 5,380 stores globally (See reference: 1)
* Key people
David Reid (Chairman)
Philip Clarke (Chief Executive)
* Revenue: £60.93 billion 2010/11 (See reference: 1)
Definition of Data & Information
What is data?
The term data is referred to as collection of numerical characteristic which is collected using qualitative or quantitative research methods. An example of data collected could be for example the number of males and females in a room and this can be displayed in many different forms and all these figures are known as 'data'.
Male 7
Female 3
Total headcount: 10
Male 70%
Female 30%
0/7 Male ratio
0/3 Female ratio
What is information?
Information is normally received in a context where it is required this is different from data, information is obtained from occurrence for example when I order something from the Tesco I am required to give my name and address because to complete the occurrence or my order.
Data vs. Information
Data is raw facts in figures which are analysed and processed as information, data is inadequate without connection to information. Information is a form of data which is in words.
Define Information System
Information system or 'IS' is any combination of technology which processes information, facilitates and helps individuals or businesses like Tesco's activities using technology to support operations, management, decision-making and many other operations.
An information system is regarded as a form of communication system in which data presented and processed as a form of social recall. An information system can also be considered a semi-formal language which supports human decision making and actions like advising on efficiency by analysing wastage and this could be wastage of time, financial resources, materials and human resources.
List all the Information System Used by Tesco
Bar code scanners
Self checkouts
Printers
Electronic point of sale
Just in time
Radio
Internet
Intranet
Extranet
Website
Mobile
CCTV
Product count (Auto inventory)
Cash register
Chip and pin machine
Information screen
ID cards
Clock in machine
Cash machine
Car wash
Club card
In store announcements
Ticketing machines
Above I have listed all the possible information systems that I memorised from my in-store experience and talking to Tesco staff members at:
Barking Side
796 Cranbrook Road,
ILFORD, ESSEX,
LONDON, IG6 1HY
Part A
Tesco's functional areas
Tesco Functional Areas
http://www.123helpme.com/tesco-functional-areas-view.asp?id=150261
All businesses need to be well structured to achieve their goals, in a large organisation like Tesco PLC people work together in different functional areas; each functional area has a specific purpose below I have listed and defined the main functional areas of Tesco:
Finance
The main activities of the finance department are:
To record all the business transactions
This means that the finance department records all the expenses that have been paid and all incomings. They also make sure that any of the departments do not spend more than they have been allocated.
Measure the financial performance of Tesco
This means the finance department is also responsible for looking at how well or badly Tesco is doing financially.
Controlling the finances and cash flow
This means Tesco has to make sure that there is enough money in the business to pay off their debts e.g. bills and the employees. They also make sure that there is enough money to survive for the company.
Comparing the predicted performance with actual performance
This means that if the company wants to invest more in Tesco, then it would be up to the finance department to make the decision on whether there are enough funds to do so, Tesco does this by looking and comparing the financial situation in previous years with the financial situation of the present year.
They also prepare all the accounts each year so that the company comply with their legal responsibilities to the Inland Revenue and complete VAT returns which they send to HM Customs.
Human resources
The human resource in Tesco like most organisations is the second most important department in the business, simply because this is where all the new employees are chosen from, the main purpose of the Human Resource department is to recruit, select, train and promote staff. This means that they have to find the right people at the person for the right job at the right time, once the new employees have been found the Human Resources responsibility continues to train and make sure that the employee reaches their full ability.
If we have an example I would say that with Tesco's human resources department, they make sure that they read what the applicants have written in the application form. The application form is very important to Tesco and that is why they ask a lot of questions about personal qualities and communication skills, because they want the right employee who will do a good job.
The Human Resources department also has a legal obligation, and that is to keep all records that they have in their possession confidential. This means that they have an obligation to ...
This is a preview of the whole essay
If we have an example I would say that with Tesco's human resources department, they make sure that they read what the applicants have written in the application form. The application form is very important to Tesco and that is why they ask a lot of questions about personal qualities and communication skills, because they want the right employee who will do a good job.
The Human Resources department also has a legal obligation, and that is to keep all records that they have in their possession confidential. This means that they have an obligation to stand by the data protection act. Also the records that are kept by the Human Resources department must have information on the needs and activities of the business. So as you can see that the Human Resources department, have got a lot of responsibility in terms of getting the best new employees, and making them reach their full potential and also by abiding by the laws that there are on keeping records in their possession
* They also take part in a range of activities such as:
* They focus on the needs of all the staff.
* They look after the member of staff whilst they work in the company.
* They are responsible for the working condition of each employee.
* They coordinate central services.
* They are responsible for the training, development and promotion
Marketing
The Marketing department have several different responsibilities, this includes: Marketing Research, advertising and sales promotion. This means when Tesco collects data by doing a questionnaire they also do presentations to tell everyone what new ideas they have come up with to make money.
For sales and promotion they are responsible for making sure that that all the promotions are out so that customers can see them, and also they are responsible for making sure that advertisements are done for Tesco and their products or services.
These are the main responsibilities that the Marketing department has. In order to fulfil them, the marketing department would need to work closely with the finance, purchasing, production and transport departments. This is because if there is a breakdown anywhere in the line, whereby the marketing department has less material than they need then the other departments are there to correct the breakdown.
Nearly all the information that the marketing department uses is all the computer databases; this information would be for example price lists, customer details and retail outlets. They would put the information on computer so that it is easy access for them when they need it, and also they are able to change and correct any wrong information without the database getting messy.
The marketing department is a very important to Tesco simply because each of the promotional advertisements comes from that department, so without them none of the customers would know what promotions are on. In fact, their Customer Insight Unit analyses their business, customers and competitors to allow them to determine strategies to meet needs, encourage loyalty and increase customer spend.
Customer service
www.tesco.co.uk
As an example we can take the dairy supply chain. In fact the milk extracted from the cows in the farm are sent to a dairy where the milk is transformed and put in boxes or bottles and transported to the store, where the employees checked and signed for the delivery ,and then put the new stock in the range for the customers.
However, if after purchasing any products, the customer discovers something wrong with the product, he can make a complaint and ask for a refund or an exchange to customer service desk ( which is part of the Marketing and sales function), which is a service set up to deal with and help the customers.
Tesco is helped in the ordering activity by new technology and among those technologies we can mention the EPOS. If Tesco is out-of-stock the EPOS automatically will re-order lists to be produced.
Human Resources
Every business would need to have an administration system, in order to be organised. If the organisation is organised then they are able to achieve their objectives that they have set themselves. The purpose of the administration system in the organisation is to create an ordered way of working which enables the business to function smoothly. The administration system does the job of bringing together the various parts of the business so that they can all work towards achieving the same goals. The ideal administration system would be to have good communication between the management and workers, and a system, which enables the objectives to be met. For example once an order has been placed, the order has to be delivered within 48 hours of the receipt.
The other thing that would make an ideal administrative system is that all the methods and procedures should be written down. This is because everyone is able to see the way in which things should be done in order to achieve their objectives. It should be written down simply because the administration systems incur problems because staffs are always being changed so they wouldn't be aware of the methods and procedures.
The third aspect that would make an ideal administration system would be to have proper procedures for controlling and monitoring work. This means that there would have to be a high level of supervision and well - motivated staff. This aspect would be important when the business is changing, simple because it would be important to keep workers under constant review.
The forth aspect would be to make sure that the administration department would be properly resourced to make sure that they reach the objectives. This is important because if the administration department isn't given proper resources then they won't be able to reach their deadlines, so it important that the administration department has the right amount of staff, materials and equipment to do their jobs properly. The fifth and final aspect that would create an ideal administration system would be to provide the proper controls and methods of supporting the people within the organisation.
This is because another name for the administration department is the support staff; this is because the majority responsibility of administration is to support the staff within the company. So as you can see that the administration system is a very important department as well as they are the backbone of the organisation, and without them the business wouldn't be organised enough reach their objectives. If we look at
Tesco again we can say that the administration department is also a very valid member of the team because they make sure that all the paperwork is in order and that whatever the other departments need they get. I think that without this department none of the other departments would be able to function properly and efficiently like they are now.
Contributions functional areas to Tesco
Finance
The finance department keeps track of all the money being earned and spend by Tesco PLC and knows exactly how much profit (or loss) is being made for each item or service sold. In fact business people consider finance to be the most important function of all. In fact, financial information enables critical and rapid decisions to be made about the business, which can make the difference between financial success and failure.
Most businesses, but Tesco PLC in particular control finances through a budget system. Each department is allocated a budget which identifies planned income and spending. The finance department regularly checks that managers are on target and investigates the situation if they are not.
The finance function is also very important for the staff since it is through this department that wages and salaries are paid.
Another contribution of finance is to prepare Tesco's accounts, which is a legal requirement for most businesses. Because the Inland Revenue needs this figure to calculate how much tax the company must pay.
Expenses must be accurately recorded as this will reduce the amount of tax which is due.
Human Resources and administration
Human Resource and administration are concerned with the employees who work for the organisation and also the paperwork. In fact the Human Resource and administration contribute to the overall business by making sure that every single employee gets:
* An induction programme
* Trained
* Good working condition
* Equal opportunities
* Treated fairly
* The right equipment
And they also make sure that the company employed the best people for the job.
All this points are vital to keep the business going. In fact, if we take an employee for instance who have not got a good working condition at work, he will not be motivated and will only do the minimum work that is required, then all the money or equipment in the world will not make the business successful. However, if he is please to do his work and give the best of him, if he is well trained and committed to the aims of Tesco, then it will be successful and that mean more profit.
The Human Resource and administration make sure that the building is secured, cleaned, safe and make also sure that the offices are spacious and pleasant for the employees. They ensure that all the equipment's are working properly.
Marketing and sales
The contribution of the marketing and sales to a business is vital for there is no point in producing goods or offering services that nobody wants to buy. The number of sales directly affects the profitability of a company.
Marketing
The marketing is the link between the external world and the business. The marketing is crucial to the success of any business. A successful marketing result form concentrating on what is known as the '4 Ps':
Product
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The type or variety of product or service the customer wants, the preferred design, whether packaging is important, whether a guarantee or after-sales service is required.
Price
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How much the customer is prepared to pay, whether discounts or credit terms would help sales, the price of competitors' products, whether other price-related features would be tempting (being able to trade in an old model)
Promotion
Where it would be best to advertise the product, the type of personal selling that would be the most effective, the sales promotions and publicity to be used, how the product should be displayed in shop.
Place
Deciding on where and how the business is going to sell it product- locally or nationally, by mail order, by phone etc.
Sales
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Sale is an important part of the marketing function. In fact Tesco's Marketing and sales department obtain databases of names and addresses so that customers can buy on the net.
Part of the marketing and sales department, the customer service function is also an important part of this department.
Customers are essential to every business because their payments are the income of the business. In fact the customer service contribution is to fulfil the customers' expectation, make them feel important and provide a range of services which will meet their needs both now and in the future.
Competitors
Internationally Tesco is ranked at number 4 in terms of sales, at number 1 is Wal-Mart which is Tesco's largest competitor originating from United States with sales of $401,244 USD in 2008 while Tesco's sales $96,210 in 2008 USD, almost 1/4 of Wal-Marts sales figures. Table below demonstrates the top 10 world supermarket leaders from who Tesco PLC competes from. (Source: Economic concentrations of top 10 retailers, 2008
Currently in the UK Tesco has a market share of 30.4% at February 2010, a increase of 0.3% from February 2010 at 30.1%.
(Source: Retail Week - www.retail-week.com/data)
Part B
What are functional areas?
Functional areas of a business are sectors or parts of a business which a business consists of and these are known as functional areas as most of the time the business cannot run without them e.g. Human Resources.
Functional areas of Tesco
Human resources
Human resources department undertakes the responsibility for recruiting, training, promoting, demoting, managing staff, sometimes payroll as well as monitoring staff and related issues. All this is done using different information systems e.g. recruitment is done their website (www.tesco.com) using online application forms and online questionnaires.
.
o Windows 2000 based PC connected to Internet/Intranet and Head Office can be used as bulletin board. (Called TESCO Network)
o Word Processing to communicate internally and externally.
o E-mail to other stores and Head Office.
o E-mail to suppliers.
o Internal telephone system to communicate with other departments and store support to contact Head Office
o Internet/E-commerce site to communicate with customers.
o Database of staff details
o Customer complaints database (detailing all the complaints made at store level)
o PowerPoint used for staff training. Along with Electronic data projectors etc.
Finance
The finance department at Tesco deals with anything to do with money, this could be anything from calculating and analysing income, expenditure, funding, support, profits, budgets, pay rate and managing debt and taxation. The main job of the finance department is to show how well the business is doing financially.
As Tesco is a very large business, it employs thousands of people worldwide and makes billions of pounds a year in sales, it is very important that the finance department is managed appropriately because the size of the company is generally calculated by sales and profits.
Tesco's finance department use many different types of information systems to collect this information, for example; EPOS (Electronic Point of Sale) is a information system used to collect sales information at Tesco
o Bespoke financial software linked to EPOS system similar in concept to SAGE. (Includes sales tracking, accounts, staff payroll, other backoffice functions.)
o Spreadsheets used for in-house financial analysis, such as checking targets etc.
Marketing
Philip Kotler 19th century "Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others."
Volney Palmer 18th century "Marketing is essentially about assembling the resources of an organization so that they meet the changing needs of the customer on whom the organization depends."
The marketing department at Tesco deals with advertising and promotion of products and services that Tesco offers, There are many different ways of getting a product to the consumer. The marketing department of Tesco would be advertising their product in many of different ways, such as on television, posters, radio, billboards etc. There several management process involved in the identifying, anticipating and satisfying the consumers requirements, within the marketing department.
Tesco have many unique ways of selling products and service, for example a good advertisement for Tesco includes things such as packaging and possibly promotional offers. Promotional offers are a big attraction and a good way to sell products through big chain supermarkets such as Tesco.
o EPOS including Barcode reader, keyboard, Chip 'n' Pin, magnetic card reader. Tills (Each till has a local memory of the top 3,000 purchases in order to speed up the processing time rather than look up the information on the server)
o Tesco.com e-commerce website.
o Standalone microcomputer with Windows 2000 for printing poster size promotional material. Uses software called File maker. www.filemaker.com (this allows the store to create its own promotional material rather than having to order it from Head Office)
Administration Department
The administration departments main aim is to try to improve the efficiency of the over all business. It also deals with admin which is not part of a functional department. Different types of communication, such as internal and external communication, are involved within the administration department.
The administration department within Tesco deals with the communication with other departments, so they can relay information between sectors. The external communication is the communication that takes place between the organisation and the outside world. Tesco has a help line that the general public can call if they need information about anything. Tesco have a couple of big call centres solely built for the purpose of taking the publics enquire.
Most Tesco stores also have a couple of phone lines for the general public to call, but the staff receiving the call might direct you to the head office (main call centre), so they can deal with your enquirer. Other external communication includes E-mail, the Tesco web site and faxing.
The internal communication deals with transmit information between staff, and any communication that takes place within Tesco. A tannoy is used in all Tesco stores so they staff can inform their customers and the staff about special offers or if they need more staff on the till information etc.
Other forms of internal communication include the staff notice board, walkie-talkies and e-mails can be classed as internal as well as external communication. Tesco have a linked internal communication system, which is an internal network, a system for e-commerce and links with other businesses.
Part C
What are information systems?
Information systems are professional tools used to collect business information; they are designed to collect and give many different types of information, there are many different information systems for example: transaction processing systems, office systems, decision support systems, knowledge management systems, database management systems, and office information systems.
Information systems in Tesco
* Transaction Processing Systems
Transaction Processing Systems collect, store, modify, and retrieve the transactions for Tesco. A transaction is an event that generates or modifies data that is eventually stored in an information system. E.g. if an electronic payment is made, the amount must be both withdrawn from one account and added to the other; it cannot complete only one of those steps. Either both must occur, or neither. In case of a failure preventing transaction completion, the partially executed transaction must be 'rolled back' by the Transaction Processing Systems.
* Enterprise Resource Planning (ERP)
Enterprise resource planning integrates internal and external management information across Tesco PLC, embracing finance, accounting, manufacturing, sales and service etc.
An Enterprise Resource Planning system automates this activity with an integrated computer-based application, its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organisation and manage the connections to outside stakeholders.
* Information and Decision Support Systems
A decision support system (DSS) is a computer-based information system that supports Tesco and many organisations across the world for decision-making activities. Decision Support Systems serve the management, operations, and planning levels of Tesco and help to make decisions, which may be rapidly changing and not easily specified in advance.
Typical information that a decision support application might gather and present are: Inventories of information assets (including legacy and relational data sources, cubes, data warehouses, and data marts),
Comparative sales figures between one period and the next,
Projected revenue figures based on product sales assumptions.
* Special-Purpose Business Information Systems:
o Artificial Intelligence
o Expert Systems
o Virtual Reality
Hierarchy of management
Tesco is a hierarchical structure because it has a lot of layers and also a lot of people reporting into more than one person before that information get to the boss. What is a Hierarchical structure? A hierarchical structure has many levels. Each level is controlled by one person. A hierarchical company tends to be a very big company just like Tesco is.
Functional areas of Tesco
Part D
Scenario outline
Home delivery: Tesco is facing problems with their home delivery, I have researched and found that when customer are trying to order online from Tesco.com the common problem that they are faced with is delivery timings.
Detail scenario
A Tesco customer ordered a laptop online and the order exceeded the delivery time frame of 30 hours, as a result of the delay the customer had to cancel the order and had to collect in store as this was the quickest method in the end the customer was left very unhappy about the whole situation.
Normally the delivery was expected from 7am to 7pm and the customer waited till 9.30pm but they did not get any delivery nor did they get any call to inform for the delay, the delivery company claimed that they had left a note and that no one answered the door, but in reality there was no attempt for delivery.
(Source: http://www.bbc.co.uk/blogs/watchdog/2010/11/hdnl_delivery.html)
The process of ordering online and booking delivery starts when the customer visits TESCO.COM, the next step is for the potential customer to search for the product that they want and add it to the basket as demonstrated by the red arrow below from the Tesco online website.
Adding to & amending my basket
Adjusting the amount of items is easy using your shopping basket on the right hand side of the screen.
Find the product you want to adjust and click the '+' or '-' buttons to change the amount in your basket. It may take a moment to update the totals.
If you want to adjust many items in your basket, add a note to your personal shopper or change your substitution policy, you may want to use the 'view basket' page.
. Click the 'view basket' button on the right of the screen.
2. You will see all your items and the quantity you have in your basket. This list is sorted by department.
3. Change the quantity of the product you want to amend and then click the 'confirm' button.
4. Your changes will be confirmed on the right hand side of the screen.
When you are ready to checkout, click on the 'checkout' button in your shopping basket on the right of the page.
If you have not already booked a delivery slot, book one by clicking on an available time that suits you.
Check your details on the checkout page and then enter your payment details.
To complete your order click the 'confirm my order' button.
We accept the following method of payments:
Visa, MasterCard, American Express, Maestro, Solo, Delta, Clubcard Plus.
We don't accept Electron cards, cash, cheques or paper vouchers/coupons.
What hours do you deliver?
At a time that suits you - and there are plenty of times to choose from!
You can usually have your shopping delivered between 9am and 11pm Monday to Friday, 9am and 8pm on Saturday, and between 10am and 3pm on Sunday.
Exact delivery times will be displayed when you book a delivery slot.
You can book an available delivery slot before you begin to place your order - this slot will be held for you for two hours while you shop.
If a delivery is missed the driver will leave a card stating the date and time they called. Please contact the number on the card to arrange a second delivery, which will be subject to a second delivery charge.
But in this case the customer was not left a card for missed delivery and this is why they did not know they had missed the delivery and as well as that Tesco customer service told them that they did not answer the door when the bell was rang but this was untrue as the customer stated that they were home all day and would have heard if the bell rang. This is a classic case of mismanagement and poor customer service and satisfaction.
Information processing tools and methods used by Tesco
> Word Processing to communicate
The current system in place used to inform about their delivery is word processing, this information is sent via email and post.
> E-mail to contact customers
The basic HTML email function is used to communicate with the customer informing them about products and services
> E-commerce site Tesco.com
Tesco.com is the largest information system used by Tesco in my opinion as this holds all information about products and services they offer with the ability to shop online from Tesco.com.
> Database to store customer and order details
As used by all if not most business, Databases are used to store employee and customer details in conjunction with the Data Protection ACT.
> Hand Held Terminals for collecting information about products and stock checking
The HHT (Hand Held Terminals) are used to pass information about products e.g. stock that needs to be sent out to customers when an online order is placed.
>
EPOS
The information EPOS (Electronic Point Of Sale) is the most important by far as this records all sale and return entries which enables the Tesco to place orders to suppliers JIT (Just In Time).
> Barcode scanners
The barcode scanners are interlinked with the EPOS systems as the EPOS system is not manually controlled where employees have to enter the product code just scan the barcode.
Difficulty with current method of information processing
There are many advantages to using the email when a business like Tesco is communicating with their customers; however there are also disadvantages that come with it e.g. using email to communicate with customers can sometimes lead to information overload, emails can easily create information overload in recipients this is because the ease of copying messages throughout the organisation can overload employees and customers with unwanted or unnecessary information to read and review and this decreases productivity and increases confusion on both sides.
Alternative tools required for resolving issue
The use of text messaging for business purposes has grown significantly during the mid-2000s. As companies seek competitive advantages, many employees turn to new technology, collaborative applications, and real-time messaging such as SMS, instant messaging, and mobile communications. Some practical uses of text messaging include the fuse of SMS for confirming delivery or other tasks, for instant communication between a service provider and a client e.g., stock broker and investor. (Source: http://live.psu.edu/story/29845)
Tesco can make use to this fast growing technology to their advantage and the customers benefit and offer a tracking system where by the customer can get the latest shipment information for the products that they have ordered online and this can be done in real-time direct from any mobile phone or handheld device connected to a network provider. This system will be simpler and easier for customers to track and trace, most systems used by businesses that deliver to customers use a special number dedicated to that customer and using that Tesco's automated system can respond with the status within seconds.
Alternative method
Currently if a customer orders a product from Tesco.com for home delivery and misses their deliver, they have two options which are to either to call Tesco and rebook the delivery slot for another day or cancel the order. I have researched two different alternative methods by which Tesco can improve their and resolve their issue with their delivery system.
* Online rebooking missed delivery
"If a delivery is missed the driver will leave a card stating the date and time they called. Please contact the number on the card to arrange a second delivery, which will be subject to a second delivery charge."
To resolve this problem I have suggested online rebooking is a delivery is missed, currently the customer is required to call the number on the card left by the delivery driver which connects them to the Tesco customer service department, although this method is operational from my research this method is outdated and inefficient, this wastes the Tesco's and its customers time and money for the phone call.
If Tesco designed an online system where by the customers can just visit Tesco.com and rebook their delivery online, the advantage on this is that it is quicker than making a phone call and the online website is available to use 24 hours a day 7 days a week and the available delivery slots can be displayed on the site for the to select.
* Option to collect in store if delivery missed
As described above in 'Alternative method' if a delivery is missed it can be rebooked or it can be cancelled, the option that is missing from Tesco's online delivery portal is the option to collect your order from your local Tesco branch if the delivery is missed and I suggest this method of delivery should be offered as the collect from store option from Tesco.com is free and this can be interlinked with the delivery system so if a delivery is missed the customer has the option to not rebook it to their address and instead collect it from one of their local stores.
Part E
Effectiveness of using alternative tools
Advantages of SMS in Tesco
* The personal nature of mobile phones makes SMS a very powerful tool.
* Most people take their mobile phones everywhere and this means they can be effective for time sensitive messages.
* People tend to read virtually every text they get, unlike junk mail, spam or adverts which are normally ignored when received via email.
Mostly when businesses send communication messages to customers, they are trying to get a response. E-mails these days just don't get an acceptable level of response any more. Excessive spam has crippled trust in e-mail deliverability and companies are looking for a good response rate to their communications. Hardly any business could stop using email altogether but by using SMS where possible a business like Tesco can boost their response rates, save huge amounts of money and be a more environmentally conscious business.
To put this into context with some numbers, here is the typical cost of sending a 1 page mailing. Also, it shows the cost per response at a typical rate of 2.5%:
Volume
Mail Cost
Response
Cost/Response
,000
£500
2.5%
£20
2,500
£1,250
2.5%
£20
5,000
£2,500
2.5%
£20
7,500
£3,750
2.5%
£20
0,000
£5,000
2.5%
£20
50,000
£25,000
2.5%
£20
00,000
£50,000
2.5%
£20
And the costs using SMS showing large savings, coupled with a typical response rate of 10%, bringing the cost per response down by some £19.62:
Volume
SMS Cost
Response%
Cost/Response
Savings compared to Mail
,000
£38
0.0%
£0.38
£462
2,500
£95
0.0%
£0.38
£1,155
5,000
£190
0.0%
£0.38
£2,310
7,500
£285
0.0%
£0.38
£3,465
0,000
£380
0.0%
£0.38
£4,620
50,000
£1,900
0.0%
£0.38
£23,100
00,000
£3,800
0.0%
£0.38
£46,200
Effectiveness of using alternative methods
The option to book collect in store has developed a lot in the last 3 years and have proven to be very popular amongst the big retailer's e.g.
Business that use click and collect
Argos
Asda Direct
B&Q
Bennetts Electrical
Bhs
Blackwell
Boots.com
Carphone Warehouse
Clarks
Comet
Currys
Debenhams
Game
Goldsmiths
Halfords
Homebase
House of Fraser
Jessops
John Lewis
Maplin
Marks and Spencer
Mothercare.com
New Look
Neweys Online
PC World
Pets at Home
Sainsburys
Tesco Direct
The Toy Shop
Toys R Us
This is because this option offers the potential customer flexibility and choice, using the collect in store option also creates additional business opportunity for Tesco as when the customer comes to collect their item in-store they may be tempted to shop by other offers and products on display in the Tesco stores.
Online shopping is continuing to grow with £4.4 billion spent online in June 2010, according to figures from the IMRG Capgemini e-Retail Sales Index, a rise of 20% from the same time last year.
However, it was retailers with a joined-up multi-channel strategy that fared best among online retailers, and IMRG figures found that those traders with stores and online facilities saw year-on-year sales rise by 27% in June, compared with 10% for online-only retailers. It's clear that retailers who take a cross-channel approach in their businesses are reaping rewards.
Customers want to be able to shop in a way that is convenient to them and click-and-collect is an ideal way to reach and influence them - not only does it improve customer service but it ensures you get the sale. Argos has revealed almost a quarter of its total sales are made through its click and collect service, compared with 10 per cent ordered online and delivered to customers' homes.
The added advantage of this process is that when the customer comes into the store to collect the goods they've ordered, store staff can try to up-sell where appropriate. In fact, research has shown that customers typically spend an additional 27% of the value of the original order on additional items in store.
Bibliography
> http://www.tesco-careers.com/home/you/it
> http://www.deloitte.com/assets/Dcom-Australia/Local%20Assets/Documents/news-research/Press%20releases/Global%20Powers%20of%20Retailing/Global_Powers_of_Retailing_2010_report.pdf
> http://www.tesco.com/termsandconditions/termsconditionsGeneral.htm
> http://www.retail-week.com/data/kantar-worldpanel/tesco-market-share-up-as-it-piles-pressure-on-asda/5010942.article
> http://tutor2u.net/business/ict/intro_information_system_types.htm
> http://tutor2u.net/business/ict/intro_information_system_types.htm
> http://www.textmarketer.co.uk/blog/2009/09/business-sms/the-benefits-of-using-text-messaging-vs-postal-services-saving-money-boosting-response-going-green/
> http://www.my-genius.co.uk/My-Blog/Aug-10/Click---Collect---the-latest-must-have---
> http://www.clickandcollect.org/
References
. Source: "Preliminary Results 2011" 19 April 2011
(http://www.tescoplc.com/plc/ir/pres_results/results/r2011/2011-04-19/2011-04-19.pdf)
2. "2010 Annual Report & Financial Statements". (http://ar2010.tescoplc.com/~/media/Files/T/Tesco-Annual-Report-2009/Attachments/pdf/tesco-annualreport.pdf)
Student: Saad Shoaib Information Systems Lecturer: Shital Nagori
6
Student: Saad Shoaib Information Systems Lecturer: Shital Nagori
25
