I am going to explain the impact of IT developments on Tesco.
1. External pressures
· Changing regulatory and legal frameworks
2. Enhanced business opportunities
· Improving customer service
3. Impact
· Cost
· Impact on procedures
· Impact on staff – Enabling home and remote working
· Integration of legacy systems
· Security
· Legal requirements – Data Information protection
1. External pressures.
Because of the changing regulatory and legal frameworks Tesco had to make improvements to their IT systems so they meet the requirements. This is an external pressure and Tesco can’t do anything about it so they have to change things within their company. For example, their ecommerce system had to be improvement because of different acts such as Data Protection Act. Another example is the customer service where they have to serve customers in a certain way and be responsible of their products so they don’t do anything against the law. They had to change their polices so they meet the requirements of the legislation.
2. Enhanced business opportunities.
Customer service is a quite important and big area of improvement. They had to put scanners in the shop floor, improve home delivery services and install self checkout tills for their customers. These IT technologies help Tesco move forward and make more money. People have more freedom when they use self checkouts and scanners. What’s more the service that they get is quicker which makes customers coming back to the shop. If they haven’t done these improvements they would have lost customers which finally mean less profit for the company.
3. Impact.
· Cost – Because of the payback Tesco purchased new IT technologies. For example, self checkout tills, they are not cheap and cost Tesco quite a lot, however after they have done it, they don’t need as much staff members working in the till as they needed before because lots of people will choose it. Another example is HP photo stations. Those photo stations are an alternative to the regular photo shops where you have to pay a lot to take a picture. When you use the photo stations the pictures will cost you much less. Tesco will get some of the money that those stations generate.
· Impact on procedures – The procedures in the warehouse has been changed. Tesco started using picking list technology which saves lots of time and organisation of products in the warehouse is clear. Instead of having documentation with all product listed where they are placed in the warehouse they use computer system which knows the exact position of a particular product. It has huge impact on the company because they could reduce staff needed in the warehouse, speed up the home delivery because they know where they have products and finally it saved them money that they would have spend on extra staff members and make their customer service more reliable.
· Impact on staff – Enabling home and remote working is a new practice that had an impact on Tesco. Employees can work from home because of the latest technology such as PDA or powerful laptop plus internet connection. It is beneficial for both sides. Tesco doesn’t need office space for all employees and people that work for Tesco can save money and time on the every day journey to and from the work place. What’s more, they can have virtual meetings and other conferences when they use those technologies that they will get and it is an advantage because different people can talk together wherever they are.
· Integration of legacy systems – It is compatibility to the archive data that Tesco store. When they were improving their systems they had to think about the data that they store and make it compatible with the latest technology so they have an access to those files when they need it. They have large databases with customer and employees information as well as products data. They had to make sure that after they introduced new technologies they will be able to access the data.
· Security – The first examples of security is CCTV. Before they installed CCTV cameras they had to have more security staff in the shop floor. CCTV allowed them to control the whole store by one or just two people. They could reduce staff needed which helped them save money. The whole system cost money and Tesco had to pay for having it in all their stores. Although they spend money, finally they have saved money in the way that they reduced staff and become friendlier for customers.
· Legal requirements – Data Information protection is an aspect that pushed Tesco to improve their IT systems. For example, Tesco run a website and they have loyalty card (Club card). It means that they store thousands of customer information. Their databases as well as website must be secure so they don’t lose their customers info and no one can steal it. It is very important because when they collect data they are regulated by the law which says that the data must be protected and in this case Tesco takes the responsibility for the data.
