Success in IS investment

4 Feb

Assessing the success of information system has been identified as one of the most critical issues in the IS field.

Today’s business organisations are described as changing entities that are largely driven by the implementation of modern information systems, which become an inevitable concern that can deliver valuable benefits.

If we look at IS as a set of interrelated and interacted elements or components that collect, store, process and report data and information that can be used to enhanced the process of decision making, then it is not a fiction that survival as well as organizational competitiveness rely heavily on efficient use of information systems.[1]

I see IS initiatives as a costly investment. Failure of IS can be considered as an expensive failure. However, IS is used in all phases and departments of an organization for purposes ranging from recording business transactions to executive decision making. Following the success cases I have read in IS investment and for the purpose of this blog, I am going to look at the retail industry, using Tesco for an example.

Tesco is a british retail giant company working in general merchandising and retail business, which makes profit exceeding three billion pounds a year. It’s the third largest retailer in the world, working in more than 12 countries with over 2000 stores in the UK. It specializes in many items including food, drinks, clothing, electronics, financial services, home appliances, health care etc.

Over 11 million people visit Tesco stores every day. Tesco has actually got one of the most sophisticated retail supply chain in the world which makes it possible for all guests to get what ever they need for the past 10 years.

As the largest global grocery retailer, Tesco successfully put into use oracle and SAP business objects Polestar applications as a preferred enterprise systems. Tesco Oracle retail warehouse  management System, Oracle Marketing platform, Oracle accounting hub, Oracle HR, Oracle BI and SAP business objects Polestar has provided the company with a solution that is now a basis for common processes and operations locally and internationally.

Previously the company used Linux System for digital marketing purpose, but after investing in oracle marketing platform, their business became more closer to their customer due to the digital marketing services which provides intelligent information about the customer buying habits. The oracle generates personalized incentive and discount scheme to encourage customer loyalty. Customers just need to register to receive oracle promotion with the swipe of a credit or debit card which is located nation wide. Each time the customer of an oracle subscriber makes a purchase, the transaction data electronically transmitted to the Oracle database, thus helping the company to identify and learn about their shopping patter and with the help of those discount and incentive scheme, they can understand their customer future purchases.

While Tesco Oracle accounting hub helped the company to perform day to day firm activities such as invoices, inventory control, customer detail, supplier details etc, the Oracle financial accounting hub provides an internal control structure to ensure successful audit and compliance reviews.

Business circumstances demand immediate attention. Oracle BI application provides Tesco proactive, event-based, and scheduled alerts that are delivered directly to users via email, handheld and other portable devices. Powerful, timely and actionable information help prevent issues from becoming problems.

A Transaction Processing System (TPS) is an IS used to collect, retrieve, store and modify transaction within a firm. Although real time processing systems are in place to react to an even within a prearrange time, Tesco also rely on their TPS due to the fact that all their transaction made to suppliers, customers and any middle parties involved are done by TPS:

An overall view of the users of Tesco IS and IT could be seen from the table below.

  Customer/Prospect Supplier Operational Employee Manager
HR Software

X

X

Supply Chain System

X

X

X

Loyalty Card

X

X

X

Insurance Policy
Quoting System

X

X

X

The first column shows the system or technology used.

While the other columns show each stakeholder, the X ticks indicates a particular system or technology used by each stakeholder. To sum up, Tesco has benefited from TPS and MIS. The business is dependent on efficient Information Technology (IT) System. Any significant failure in the IT processes of their retail operations (eg bar code scanning, or supply chain logistics) impacts ability to trade. Tesco recognise the essential role that IT play across the group in allowing efficient trade and achievement of commercial advantage through implementing IT innovations which improve the shopping trip for customers and make life easier for employees.[2]

In my opinion, the effectiveness of an information system lies in the potential to apply the knowledge of information systems and technology collectively to help organizations strive more successfully in the market place. In this instance the scale of Tesco and the value information provides the distributor in terms of managing flows of data across divisions requires not just one information improvement but many IS systems. It even justified moving away from their existing operating system to use the appropriate Oracle tools.

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