E Commerce and Optimization Software and Services - Essay Example

1 Introduction The Internet continues to modernize the world’s economy. It is apparently changing the way people live, study, work, participate, and devour. At the hub, of this rebellion is technology. Technology has moved from the "back office" to the leading edge. Namely, the interface between customer and the organization has changed spectacularly. Increasingly, technology is shifting the organization’s associations with its customers from a "face-to-face" to a "screen-to-face" communication. The Internet is not an innovation that concerns only one or two sectors of the economy. Because it revolutionizes the way businesses should prudently systematize their activities and go to market, the Internet affects all economic commotions. The business being conducted on the Internet which is now called ‘Electronic Commerce’ has a remarkable history. The continuous research and development has enables corporate organizations to reconstruct their business strategies. The integration of electronic commerce applications lays the foundation in the organization’s digital business process. This report will display the micromanagement and implementation of the current e commerce technologies in to current businesses. The purpose is to analyze the methodologies and processes required for integrating electronic commerce applications. The focus will be on the current practices involved for the enterprise system integration. The organization which is preferred in this report is Tesco PLC. The origin of Tesco was started in 1919 when Jack Cohen started selling groceries from the stall in London. Since then Tesco has claimed itself as one of the leading food and grocery retailers in the world and has over 2000 store worldwide. It was rewarded to adopt award winning online strategy (Award-winning online strategy for Tesco. 2009). Over the years, the organization has focused on maintaining a successful and sustainable business model. The elements consist of diversification of stores in new areas with new services and products. In 2000, Tesco was representing only 8% of the global gross domestic product (GDP). As 65% operations of Tesco selling space are dispersed across the globe representing 53% of GDP. In 1997 the international business generated 1.8% profits. In 2010 the profit grew to 22% which is a remarkable achievement. The organizations recorded revenues till February 2010 were $ 5,494.1 million. The stores are dispersed in Europe, Asia and the Unites States. The geographically dispersed locations of Tesco stores are shown in Fig 1.1. Tesco currently has 472,000 employees. For achieving customer loyalty, Tesco is focusing on maintaining a business model by value added retailing. In spite the recession, Tesco was able to meet customer satisfaction by launching schemes for instance double points, Club cards, Discount brands, Market Value and finest collection ready meals. By implementing the value added retailing, the sales figures were immaculate also changing customer behavior. In a low growth market this strategy was a successful one for Tesco (DATAMONITOR: Tesco PLC. 2010). FIG 1.1(Wikipedia contributors) Tesco as an international retailer included a variety of non food merchandise in an effective way and represent itself with a variety of products, not just a grocery store. Category types of stores include Tesco Extra, Tesco Superstores, Tesco Metro, Tesco Express, One Stop and Tesco Home plus. The organization acknowledged its existence strongly with the effective and aggressive expansion in the market shares across all categories. 2 Overview The overview includes the adoption of e commerce technology for the organization. The emphasis will be given on the e commerce application integration in the organization’s environment. The next portion will justify the selection of e commerce application. It will include the changes which are made for the organization, employees, customers, and business partners. The last section will include the evaluation of the e commerce applications which are deployed within the organization. The success and failure factors will be discussed in this context. 3 Adopting E commerce Tesco has developed sustainable business model which is exposing defects to the competitors. Addition of value added retailing to the model, Tesco knows exactly who its customers are and what are their requirements (, Profits from The Lean Business Model by Prof Dan Jones). Previously the organization was developing in-house e commerce application development which suits perfectly according to their digital requirements. The in-house development was the major success as the organization constantly increases growth. Later it was decided to hire a vendor ‘ATG’ for the development of e commerce applications (, Press Release: Tesco Selects ATG ). The aim was to give the internal IT staff a message which was “Make a difference rather than writing core software”. The reason for selecting ATG was the similarity of their software with Tesco’s current core systems with enhanced functions and processes. ATG is the arts technology group inc., it has over 1200 corporate clients dispersed over fifty countries including world class organizations (, ATG: e-Commerce, Cross-Channel Commerce, and Optimization Software and Services.). In 2009 James McNuity head of the group IT procurement announced that” We are pleased to enter into a strategic partnership with ATG that will allow us to use this leading-commerce solution in Tesco”. 3.1 Tesco CRM A very good definition of CRM is available in the network dictionary which states that “an information system that is used to plan, schedule and control the presales and post sales activities in an organization to manage customer relationships. CRM embraces all aspects of dealing with prospects and customers, including the call center, sales force, marketing, technical support and field service” .Tesco know the significance of their customer, keeping this in mind right choice of implementing CRM was made. The focus was on the key areas. The application supported their sustainable business model, as customer satisfaction and loyalty is mandatory, Tesco has implemented this specialized software so far; Live Expert, Rightnow on Demand CRM and Every Comments Helps. The above three software were based on enhancing customer satisfaction to achieve customer loyalty. As time passes by, Tesco has replaced the applications with the updated one. ‘Every comments helps’ and ‘Every Comments Helps’ were installed on 2008. The software ‘Live Expert’ was implemented in 2009. 3.2 Tesco Supply Chain Management Supply chain management can be defined as “the management of the movement of goods and flow of information between an organization and its suppliers and customers, to achieve strategic advantage”. Every day 11 million people visit to the stores which are dispersed all over the world. The customer only knows to pick the product they want to buy and go home. That is what customer wants to know. The science of logistics behind the product is the most complex on the planet. As the number of customers and stores increased, the software was also updated. The software currently drives the workload for handling the most complex supply chain management are Online retail Category Management, Demand Forecasting, Forecast Server, Gold, Electronic Shelf Edge Labeling, G-Log, Gold Central, Merchandizing Systems, Mobile Manager, Price Optimization, Procurement, 4Order, Foundation Suite, True VUE, Continuous Replenishment, Supply Chain Management, LLi, Human Centric Partner Management, Transportation Management, Vehicle routing and Management, Fleet and Distribution, Global data synchronization, Gold Stock, Director Warehouse Control System, Performance Management, Warehouse Management and Pocket Office. 3.3 Tesco Entity Resource Planning The definition of ERP is defined as “a business management system that integrates all facets of the business, including planning, manufacturing, sales, and marketing”. The role of ERP systems lays the foundation for the development of a complex information system. The ERP plays an essential role for supporting Tesco’s business strategy and complex processes. The approach to manage the complex process and the information flow in the company, ERP provides a factor-driven quality which can be easily modified according to customer requirements. As Tesco has its own in-house software development team, the programmers have the experience to develop and implement partial ERP modules on the state-of-the-art technologies of Oracle. Before the implementation of this solution, TESCO was using tally and other custom had made software for processing of company internal financial data including assets management. As Tesco has mass clientele, the workload is infinite. There is a requirement of a powerful system to manage the business process and data logic. Tesco is currently using state of the art Oracle Financials for enterprise resource planning. 3.4 Tesco B2B and B2C Tesco supports both business to consumer and business to business operations. There is a requirement of implementing the applications supporting features of both B2B and B2C. The applications which are currently implemented in this context are, GXS Trading Grid, B2B Gateway, Real Relevance Retail Suite, Microsoft IIS, Open Deploy and Team site. 4 Organizational Impact 4.1 CRM The implementation of CRM added new technique for interacting with customers. The customer feedback scheme was launched, enabling customer to give their feedback regarding Tesco services via SMS, phone or email free of charge. The next feature for providing better customer services was the ‘Live Expert’. The kiosk with interactive display was installed in some selected stores. Customers can select the topics available with the touch screen. If customers want to know an expert opinion about any electronic product, they can interact with the kiosk. The most experienced technical support personnel will give the briefing on the kiosk regarding the product. One more customer loyalty service was launched named as ‘Right Now on demand CRM’. Before buying any product, customer can communicate with the technical staff when buying technology products online or from a store. The technical staff can respond instantly via phone, chat or email regarding customer queries while buying any technology product. 4.2 SCM The supply chain management is the most complex of domains in Tesco. Total 4,813 stores are wide spread in 14 countries across the globe. The organization needs to focus on key areas in order to adopt a successful supply chain management. E commerce has facilitated Tesco to improve: 4.2.1 Cost Efficiency The transportation and cargo documents can be exchanged electronically.  E-commerce facilitate shippers, freight forwarders to rationalize document handling without the financial and time speculation which is vital by the manual and conventional document delivery systems. 4.2.2 Distribution Structure E-commerce enhanced Tesco to be more flexible in order to manage the vastly complex movement of products and information between businesses, suppliers and customers. E-commerce will secure the association among customers and distribution centers. Customers can manage the vastly complex movement of products and information via supply chain. 4.2.3 Customer Orientation E-commerce is a vital route in the sustainability of logistics and transportation services for both internal and external customers. It enabled the organization to provide improved services to their clientele. The efficient supply chain management system of Tesco increased the growth of the e-commerce enterprise that is significant to the business at the same time lowering the operating costs. Customers will be able to track shipments, access price information, set delivery orders, and deposit freight bills. 4.2.4 Online delivery tracking Online delivery tracking gives instant order information for customers from the website. The customers can track and verify the delivery of the products. The transportation cost of customer and recital can be evaluated. The customers can negotiate the payment options as well. 4.3 ERP For the demonstration and operation of a high level view, Tesco has implemented a state of the art ERP Oracle financials. The ERP prime objective was to add these features to empower the financial processes; Centralized banking, MOAC, Sub ledger Accounting and Ledger Sets, eBTax, Global intercompany system, Reporting using XML Publisher and R12. 4.4 B2B & B2C Tesco supports both terminologies in the E commerce terminology. The business to business communication and business logic is conducted between different vendors of Tesco. The deployment of applications has been implemented to support the business model of Tesco in an efficient way. Tesco has implemented GXS trading grid to enables the real-time flow of information linking businesses in spite of technical capability, standards preferences, spoken language or geographic location (, GXS - Products - Trading Grid Overview ). 5 Evaluating E commerce Tesco has implemented many applications for enhancing E commerce features including CRM, SCM, B2B & B2C and ERP. It has proven to be successful by purchasing applications supporting their business functions. The software deployment approach is not standardized. It worked for Tesco though. As Tesco business model follows expansion of services and features for customers with the value added retailing. Tesco was also awarded for adopting the best online strategy. The key element of this award was the launch of the store type named as “Tesco Direct”. This store supported the multi channel retailing by offering non food products online. Tesco has also won the supply chain excellence award for retail and distribution in 2007(Award-winning online strategy for Tesco. 2009). The overall execution of delivering the quality, efficiency and customer loyalty is up to mark. One weakness I would like to highlight, Tesco has implemented a multi vendor environment which is devastating to manage. Tesco has implemented above 200 applications, it is extremely difficult to troubleshoot and ask for support to different vendors. This will be time consuming and not easy to manage. The organization must adopt a standardized software policy for making troubleshooting and maintenance tasks easier. References DATAMONITOR: Tesco PLC. 2010. Datamonitor Plc. Award-winning online strategy for Tesco. 2009. Centaur Communications. Customer Relationship Management. 2007. Network Dictionary, , pp. 129-129. Supply Chain Management. 2007. Bloomsbury Business Library - Business & Management Dictionary, , pp. 7197-7197. , ATG: e-Commerce, Cross-Channel Commerce, and Optimization Software and Services. . Available: http://www.atg.com/en/about-atg/ [11/15/2010, 2010]. , GXS - Products - Trading Grid Overview . Available: http://www.gxs-au.com/products/ [11/16/2010, 2010]. , Nick Lansleys Technology for Tesco.com Blog: Background to Tesco.com adopting ATG e-commerce platform . Available: http://techfortesco.blogspot.com/2009/03/background-to-tescocom-adopting-atg-e.html [11/15/2010, 2010]. e-Commerce Platform Available from: http://techfortesco.blogspot.com/2009/03/background-to-tescocom-adopting-atg-e.html. , Profits from The Lean Business Model by Prof Dan Jones . Available: http://www.thinkingmanagers.com/the-thinking-ceo/lean-business-model [11/15/2010, 2010]. , What is ERP? - A Word Definition From the Webopedia Computer Dictionary . Available: http://www.webopedia.com/TERM/E/ERP.html [11/16/2010, 2010]. Wikipedia contributors. File:TESCO international2.Png Wikipedia, The Free Encyclopedia. , Press Release: Tesco Selects ATG . Available: http://www.atg.com/en/about-atg/news-events/press-releases/detail/?id=7900087 [11/15/2010, 2010].  Read More