Management Information System: Tesco - Case Study Example

Today, in this competitive world sustaining is difficult. Any measures that improve performance are welcomed. Organisations are using different strategies. Each one is duping the other. This is creating additional pressure. To cope with it organisations are using every means. One such way is using management information system. It helps in decision making. Today all organisations make use of it. With technological advancement it has become easier. “Management information system (MIS) is a process where the internal controls of a business covering the application of people, documents, technologies, and procedures by management accountants are used to solve business problems such as costing a product, service or a business-wide strategy”. (Brien, 1999) It thus helps in strategies. Reporting is possible at all levels. Today with management information system things have become easier. Keeping records have become simple. “It helps to track data related sales, stock, and other important thing that will help the company”. (Brien, 1999) This are then compiled. It gives trends. It also helps to compare easily. Errors are reduced. This helps to prepare reports. Bringing all departments together are possible. Decisions are faster. This has reduced burden as it is easy to use. Even marketing says “marketing is where people, tools work together to collect, analyze, find out, and use information for decision making which are accurate”. (Kotler, Keller & Kevin, 2006) Dealing with people calls for proper records. This deals with that aspect. It helps to build the strategies keeping in mind competitors. The usage has been fast growing. It is even getting industry base with specifically designed for each. Tesco is using MIS to its advantage. It is a retail giant. It has used it to increase market. Here both the product and service is important. Long relations are built on it. The process works as shown below (Maurer, 2008) Figure 1 Data transformation for decision making for Tesco We see here that data collected help to come with strategies. All the data are collected. It is seen that they are relevant. The data are fed. From all the data information is collected. These are those which are important. Differentiating those is important. Based on those a report is formed. Analysing the report helps to build strategy. This thus acts as a guide. Tesco has used it fully. They have integrated it. This has increased its benefit. Since, information from all departments of Tesco is considered it improves relevancy. It also makes decision sounder. Using this final report is prepared. Every department gets it. These help them to move through the future. It acts as a reference guide. It shows even small factors. So, companies design their own solution. This helps departments as “it helps the management to design their own process for the risk involved is MIS and choose the correct way which will result in growth and development by making evaluation correct and better”. (Maurer, 2008) This improves efficiency. Even the results generated are effective. Today every organization is making use of one. We see how this is helping service industry to gain advantage. Tesco is also into manufacturing. Here customer is important. Satisfying them is important. Here the process is “more into transaction and is dependent on volume and which is affected by customer showing efficiency and have a low value per transaction”. (Gupta & Tyagi, 2008) Looking after their demand is most important. Customer has the highest importance here. The customer satisfaction chart for Tesco is as follows (Metaxiotis, 2005) Figure 2 Customer Satisfaction Model We see that using all the factors that could influence Tesco decision to build a model. It uses employees. They are the main constituent. They define the success. They are people who deliver on the field. It looks into the customer perspective. This helps to define their wants. Using technology along with it helps the company to deliver properly. It results in good services. It is reflected through customer satisfaction and productivity. This helps the company pursue its goal. This has resulted in development of many tools. Tesco with its sheer presence is making use of it. This is helping them. Some of those are Balance Scorecard: Tesco uses this tool widely. It has resulted in getting good result. It uses four perspectives. “They are customers, Financial Operations, Internal Operations, and Learning and Growth”. (Gupta & Tyagi, 2008) Today “financial and non financial information are important as even a slight variation can affect the productivity and the bottom line”. (Gupta & Tyagi, 2008) This tool helps to do that. It brings together all information. Reports are prepared on that basis. This makes the report sounder. Decisions takes are better. This is seen by the fact that “industries like healthcare, government, manufacturing, NGO’s, services all are using it”. (Gupta & Tyagi, 2008) The advantage is the adaptability. This has led to wide usage. Tesco due to this is able to save on cost. Integration of supplier chain: Tesco has integrated the supplier information. The retailer has been integrated with supplier. This has resulted in “direct delivery to the stores has helped Tesco and this was possible due to the strong warehouse and the integration with the supplier which has made handling better ensuring that the goods are there timely”. (Newbury, 2007) Here, MIS has helped to find the stock in store. This has resulted in balancing investment in it. Queue Management: Tesco has used this successfully. This has reduced queue. Customers as a result are happy. Here Tesco uses “MIS for a policy, called One-in-front, where when a new customer comes and there is a big line for payment then an automatic system ensures that the management knows it and a new counter starts to satisfy them”. (Lucking, 2008) This is helping to predict demand. It also helps to determine the number of visitor. Tesco as a result is able to decide better. Building Brand experience: Tesco has used MIS to build brand. The CRM strategy along with this has helped. It has done this by “giving Club Card which has allowed gathering information about customer and this has helped them to gain advantage compared to its competitor making them have more information”. (Paul, 2008) This has been integrated with MIS. It has made them a leader. It has also helped to manage service inventory. This has resulted in Tesco use different strategy. This has caused “Tesco to shift to a pull environment, where goods are done when there is actual demand at where there is a shift and production starts so that the goods can reach to the customer and while doing this it is ensured that the customer is satisfied and also see that the cost is down and there is no stock thus matching demand to production”. (Chopra & Lariviere, 2005) This has made MIS usage more efficient. By using this Tesco has brought down cost. This has also led to benchmarking. Having MIS improves benchmarking. This is because it helps to compare. The result based on this is sounder. “These have allowed objectives and targets to be decided and then strategies to be planned so that those goals which have been set are done and this is done by doing it at levels so that comparison is easy and this helps the company”. (Clark, 2003) This has helped the Tesco. Tesco due to this has been able to come up with the following framework. Figure 3 Tesco Integration of department The above diagram shows it. (Higgins, 2008) Here the integration has allowed Tesco to a unified model. We see that “MIS has helped Tesco to come up with a process where the automated rule based mapping is helping the company to pursue its strategy and has removed the unnecessary networks which were presented there”. (Higgins, 2008) This is further illustrated below (Higgins, 2008) Figure 4: Tesco Department Integration Here we see that “the different departments have integrated their work and are working towards a same goal which has led to formulation of strategy keeping in mind the overall structure and the benefits for the entire department”. (Higgins, 2008) This has been due to MIS. It has allowed the ease. Today MIS is widely used. Tesco has grown due to it. Companies all around are using this. It has helped to come with new strategy. By “integrating information, process being standardised, and proper chain to have good supply, offers producer a way that can help them to cut cost and provide service quickly and at the same time see that there is better transparency so that customer are more satisfied and employees know what to do”. (Caruso, 2009) It helps in the following ways Develop customer insight and interaction: To maintain long relation it is important to provide good service. It is important to understand them. A holistic view is needed. It can be done by having management information system like enterprise resource planning. It will help “to improve the strategy by collecting information from different sources, like the supply department, marketing and others who come speak to customers so that their wants are better understood”. (Caruso, 2009) This has helped Tesco to understand better. Reports based on it will be beneficial and provide customer information. Tesco on its basis has built strategy. Achieve global visibility in a demand driven world: Optimizing inventory for Tesco is important. Pattern of taste is changing fast. So, Tesco has lots of stock which are outdated. Also having lots of inventories affect their cash position. It will help to “know where stock is in the supply chain and the place where it needs to be transported so that the cost and time is saved and it allows that goods are easily”. (Caruso, 2009) It will reduce cost. Tesco need not pile stock. They can invest in other useful projects. It will improve their performance. Customers will know what is available. It will match real demand and hence improve performance for Tesco. Lean Manufacturing, global sourcing and supplier integration: Producing at low cost is essential. Tesco delivers it at low cost. This is done by identifying people. This will be facilitated by MIS. It will provide useful information related to supplier. They can be contacted. It will also help to find the lag. It will point areas where they are not doing well. Working on those will help. It will provide a fully integrated approach. Tesco due to this has grown. They have increased branches. This is a tool which is being used extensively. Managing for higher performance: It helps Tesco to identify key indicators. Management can base their decision on those. “The effectiveness of this is realised when managers can access information that presents all information relating to the business and then use it to prepare strategy for all levels and integrating those so that every part is able to take advantage”. (Caruso, 2009) This is difficult with varied operation. Having a system for that will help Tesco. It will help them to deal with the future. Making goals for them will be easy. It will thus help to develop. Keeping an eye on the future will build good image. It will improve performance for Tesco. Responsive Customer Service: This helps to solve problems. “It helps to solve the problems related to customer quickly as the system helps the company to have access to the information that helps to increase production for the company and at the same time satisfying them”. (Caruso, 2009) This helps to gain markets. Customers are contented. They feel satisfied. They speak high about the company. This spreads word of mouth. It helps to build image. This has build Tesco brand. People prefer to shop from them. This has increased Tesco’s base. Efficient Financial Reporting and management: Decisions made are sounder. It gathers information from all sources. Thus helps in proper reporting. Since, it considers every data the reporting is better. “Integrated information helps to see every small information and see that decisions are arrived without fights and this helps to improve work and come with better decisions”. (Caruso, 2009) It thus helps to arrive at decision faster. It quickens the entire process. Also, since it uses most information the reporting proved beneficial. It thus helps in improvement. This has helped Tesco. Increased Customer Satisfaction: Customers get what they want. This makes them satisfied. They feel contended. “Companies receive tons of information related to the product, the service, the process to manufacture, the sales force, the different conditions, and so on and using this information to identify the needs and wants helps to come with better strategy formulation which helps to increase the profits and make performance look better”. (Caruso, 2009) This makes Tesco receive more customers. As customer gets what they want Tesco performance is improving. Still despite being used widely it faces many challenges. Tesco also faces a lot of them. In spite of this it is used. Some of the challenges faced are Measuring human resources: Human are critical for Tesco. Employees are vital for them. They deliver for them. Measuring their performance is critical. In case it is not done well it has a negative effect. It de-motivates them. They don’t want to work. Employees look for alternatives. For example “measuring productivity in terms of revenue per employee resulted in productivity been decreased”. (Gupta & Tyagi, 2008) It raises eye on their work. This is a worry. Having scorecards for them is reflecting. It has also created negative impression. Tesco needs to develop strategies to counter it. Improper information: Information gathered needs to be accurate. In case there is fault it affects. The organization comes with wrong strategy. Collecting all information is not easy. There will be some information to misguide. It is important to eliminate it. This needs for good analysis. Using the incorrect data will affect. This can lead to the growth. This is something which Tesco has to be aware of. This could lead to Tesco coming with wrong interpretation. Difficulty in gathering data: Tesco faces difficult to find data. People are reluctant to release all information. Any information concealed will hamper growth. It will result in wrong decision. This is a worry. Tesco needs to find ways. This will help to gather better information. Difficulty in integration: It also becomes difficult to integrate information. “Integration of different department is also sometimes difficult as different department has different ways to look at things and to convince them to a common platform becomes difficult for the management”. (Berkley & Gupta, 2004) This has raised concerns. Tesco needs to be careful. It will help to give good result. We see that it is widely used. In spite of the weakness it still finds relevance. Tesco is making use of it. This has helped them. Their profits have grown. Using MIS has helped. Even the minute information is considered. Getting information from different source has helped. This has helped Tesco to expand. It has made them move ahead. It has also helped to bring the three tier of management together. Tesco due to MIS has come with decision fasted. This has helped integration. Working in tandem has helped. Tesco has been able to consider every matter. This has helped to consider all information. This has helped Tesco. This has helped to “manage the work force well that deals with what the customer wants and working towards improving their performance”. (Metaxiotis, 2005) This has made it as a tool. Its usage has grown for Tesco. They have pioneered it. They are also developing it to suit their model. It has resulted in “more accurate decisions improve flexibility and see that all ways to ensure quality and service has ensured that decisions are sounder”. (Metaxiotis, 2005) The effectiveness has grown. This has ensured that Tesco make use of it. Its usage with expanding outlet will increase. In terms of “future the ground is very fertile and management heeds to work towards achieving better service for the customer to improve their satisfaction level and this can be done by improving the quality”. (Metaxiotis, 2005) This has made that companies need to use it better to get success. This has made companies concentrate on it. The benefits are high. It covers the cost. It helps in long term growth. It builds confidence. Companies are still working to develop it to suit their model so that they suit the requirements. This will help in the future. It will help the company to grow. Thus, we see that MIS has helped Tesco. Its usage will further increase. Tesco needs to make use of it to stay ahead. It will make them lead. It will improve their performance. It will also help them to become leader. This will act as a tool for growth. References Berkley B & Gupta A, 2004, “Improving service quality with information technology”, International Journal of Information management, Volume 16, Issue 2 Brien O, 1999, “Management Information System: Managing Technology”, Irwin McGraw Hill, Boston Caruso D, 2009, “Integrated enterprise resource planning improves performance”, David Caruso & Associates Inc, AMR Research Chopra S & Laviviere M, 2005, “managing service inventory to improve performance”, MIT Sloan management review Clark M, 2003, “benchmarking to improve all aspects”, Volume 4, Issue 9, page 183-187 Gupta P & Tyagi R, 2008, “Performance management and scorecard”, UK Higgins J, 2008, “Tesco Channel Information Management”, Technical Director, Tesco, UK Lucking M, 2008, “Queue Management in Tesco Stores”, UK Maurer A, 2008, “Optimization alternatives of information systems for risk management”, Information on Economics, Volume 47, Issue 3, Germany McLean V, 2002, “improve customer service in insurance industry through MIS”, Micro strategies Metaxiotis K, 2005, “levering expert system technology to improve service industry”, National Technical University of Athens, Emerald Group Publishing Limited Newbury, 2007, “Tesco to expand global business by modernising supply chain with MIS’, Micro Focus Paul T, 2008, “Tesco: the brand experience is everything”, UK Read More