Management for Efficient E-Business IT Infrastructure - Essay Example

?Management for Efficient E-Business IT Infrastructure: Tesco Virtual Store Introduction The new systems that have been created for IT infrastructurehave become so easily created and maintained that small businesses as well as large businesses can use the technologies in order to increase their e-business presence. An example of this type of easily used technology is that of the QR code barcode system. Tesco has created technology that allows for the use of QR code technologies to be used to create a virtual grocery in which the consumer takes pictures of their purchases and they are delivered at a designated time after they have come home. In managing a system such as this, the primary side of the IT infrastructure is through the use of the barcode system as it is used to create orders. Fortunately, the technology is readily available, so easily gained that any person can go out on the internet and create a bar code for this type of use. In using a virtual store environment to increase sales and diversify locations without the investment of stock, the management of such a system is minimally necessary and highly dependent on the available external systems of bar code creation and reading. IT Management The good news with creating a bar code system for a virtual outlet concept is that the costs are low and the management of the system is primarily concerned with the calculation of orders and the distribution of product. The application that is used for the system is a free download from a variety of resources for the consumer and the creation of bar codes can be done by anyone who has accessed to the internet and to a system that allows for the complete functionality required. Horizontal service level agreements are created when a company uses an external resource for creating an integral part of their IT business model infrastructure. The problem that can come from a horizontal service agreement is that the service will be limited by the terms of the agreement and collaborative structures may not always be part of the agreed upon items that an external resource is willing to address (Beulan, Ribbers, and Roos. 2011). A company like Tesco uses internal resources in order to handle this side of the process. In creating a system in which sales and order calculations are integrated with inventory and distribution, the company is able to control their system and devote full attention to the issues that arise. On the other hand, a vertical agreement is made for application management. The service is offered on a per application basis is concerned with the whole process and is a much more amenable type of agreement (Beulan, Ribbers, and Roos. 2011). The nature of the agreements are made through this type of encompassing responsibility because an application will not work if the whole process is not attended, thus in this way, the external resources are using the same sort of theory that Tesco has designed, which is an internally controlled system that will work or will be worked on until it does work. This is good business as an application has no value if it does not work. In managing the IT infrastructure for a e-business model concept, a great number of pitfalls can occur. According to Sparrow (2003) the smartest way to manage IT infrastructure is to outsource the management of IT elements selectively. The management of specific parts of an IT system can be sold to different providers. Academic research has shown that the most successful businesses will have selective outsourcing strategies. Tactical outsourcing occurs when specific problems are beyond the capacity of internal resources to manage. Strategic sourcing occurs when a company looks for a designed package of resources from which to outsource their needs, creating the highest level of product for the lowest possible cost by using different sources for different aspects of the structure (Sparrow 2003). In sourcing is, however, almost universal as most businesses will retain some of their IT management in house. It is not always the most reasonable or sensible decision to try and support all aspects of IT management in house, but retaining some will provide for a system of control over all of the outsourced elements. Problems that can occur are concerned with a lack of understanding about what has been outsourced, too much dependency on outsourced elements, or not utilizing trustworthy systems that have been proven as successful (Breakfield and Burkey 2002). When managing relationships with outsourced management of IT elements, several key issues must be kept in mind: The use of key performance indicators and performance measures Monitoring of occupational health and safety and the environment Coordinating production Determining responsibility for costs; and Post-implementation reviews In order to effectively create management control of outsourced IT it is crucial to develop key performance indicators (KPI‘s). The most important factor in creating KPI’s is in defining the expectation with the control that the provider has in attending to that expectation. Case Study: Tesco Virtual Grocery A new innovation by Tesco provides a good example of how e-business is growing and integrating concepts in order to create new levels of service to their company. Tesco saw a market in Korea for their products and had quickly established themselves as the number two grocery in that country. In looking for a way to become number one, they decided to look for a solution which did not include building new stores. Instead, they have created virtual stores that are panels of lighted displays that provide pictures of food with a bar code. Customers can be down in the subway, the first place they tried the concept, take pictures of all the food they are interested in purchasing with their Smartphones, which pick up the bar code from an app, and have their order delivered to them shortly after they arrive home for the evening. According to Tesco, while they have not yet hit number one, this innovation is pushing them towards closing the gap. As a result of the virtual store concept, sales have increased by 130% (Anderson 2011). One of the interesting elements of this concept is that some responsibility for the technology is in the use of it by the consumer. While this is not unusual that a device is relevant to the overall experience, the consumer is responsible for taking the photo of the bar code in order to facilitate the purchase, which would create some difficulties in managing this type of e-business concept (Design Bloom 2011). The technology that is used is based upon the development of the QR code. QR code is designed to be used with I-nigma software. This software was designed and is owned by 3GVision and is a flexible barcode scanning system. This system is primarily useful with the QR code system in which barcodes are used for marketing, retail, or other uses that are yet to be imagined. This new technology has been utilized by Tesco for the purposes of their new shopping concept and is also going to be used in Best Buy, which was announced recently. In the last few years, a number of different barcode platforms have been introduced, but it appears that QR code systems has emerged as the front running system for this type of application (O’Sullivan 8 June 2011). 3GVision is the company that provides the software that is being used for Tesco. According to their website, “3GVision's i-nigma is the industry's most comprehensive mobile barcode end-to-end solution comprising of a highly intuitive and simple barcode-creation, campaign management and reporting platform to fast-track consumers to the mobile internet” (3GVision 2011). The I-nigma software that is used for the QR code systems is downloadable on the web-site, and is therefore available outside of the specific retail outlet that is being targeted for shopping. The website also offers free software on the site through which the consumer can create a barcode that is a message or any number purposes. Imagine a wedding invitation that is sent via a barcode that will be displayed once the recipient scans it. Another use can be through messages and so forth. The barcode is merely an image and therefore can be put on merchandise such as t-shirts and merchandise in order to be scanned so that a message can be discovered by anyone with a phone ready to scan the code. QR Code As innovative as the Tesco grocery concept is, the barcode system through QR code and implemented through 3GVision has been fully developed and is a working application that has a strong infrastructure and history. QR, or Quick Response code is the creation of Denso Wave. The original code was designed for uses in “ultra-high-speed and omnidirectional reading” (Kato, Chai, and Keng 2010, p. 51). The QR code has features that include a high data capacity and density with levels of error correction capabilities. The uses of the code can be multi-dimensional, approaching a wide variety of purposes for marketing and sales (Weir 2010). One of the primary uses for bar codes is in sharing information. Once a bar code is scanned by a consumer it can be used to send that information contained within it to others through networking sites such as Facebook, Twitter, or simply through e-mail. The one who sends the code can share the code with all of their online contacts, thus creating a spreading viral marketing moment without a great deal of expense. Conclusion In managing an IT infrastructure, it is vital to make decisions about what part of the structure should be handled in-house and which should be handled by outsource providers. When examining the way in which these providers will service the overall system, the best way to approach the problem is through selective outsourcing strategies. In choosing the parts of the system that best would be held in house, outsourcing those parts that can be divided amongst others in order to create a whole supports higher levels of control. In assessing the way that outsourced managers are meeting expectations, KPI’s should be developed in order maintain even quality and control. Within the case study that has been done on Tesco, it can be seen that through the use of publicly available applications and software, many of the pitfalls that could have occurred in the concept grocery model have been avoided. The use of existing technology means less chance of problems in its use by consumers. Therefore, the main management issues reside in the technologies for calculating orders and in the distribution, which means a lateral move of those technologies from the physical stores to the virtual stores. In this way, the management of IT has been accomplished through using existing technologies in an innovative way. References 3GVision. 2011. [Online] available at http://www.i-nigma.com/hp.html Anderson, George. 6 July 2011. Tesco takes virtual store to subway riders in South Korea. RetailWire[Online] available at http://www.retailwire.co m/discuss ion/15360/tesco-takes-virtual-store-to-subway-riders-in-south- korea Beulan, Eric, Pieter Ribbers, and Jan Roos. 2011. Managing IT outsourcing. London: Tailor and Francis, Inc. Design Boom. 2011. Tesco virtual market in subway. Design Boom[Online] available at http://www.designboom.com/weblog/cat/16/view/15557/tesco- virtual- supermarket-in-a-subway-station.html Breakfield, Charles V., and Roxanne E. Burkey. 2002. Managing systems migrations and upgrades demystifying the technology puzzle. Amsterdam: Digital Press. O’Sullivan Cian. 8 June 2011. Mobile bar codes growing all over the world. GoMo News. [Online] available at http://www.gomonews.com/26242/ O’Sullivan, Cian. 27 June 2011. Tesco nails mobile shopping with QR code virtual store. GoMo News. [Online] available at http://www.gomonews.co m/ tesco-nails-mobile-shopping-with-qr-code-virtual-store/ Sparrow, Elizabeth. 2003. Successful IT outsourcing: from choosing a provider to managing the project. London: Springer. Kato, Hiroko, Douglas Chai, and Keng T. Tan. 2010. Barcodes for Mobile Devices. Cambridge: Cambridge Univ. Pr. Langfield-Smith, Kim, David Smith, and Carolyn Stringer. 2000. Managing the outsourcing relationship. Sydney, Australia: UNSW Press. Weir, Michael. 2010. Qr codes & mobile marketing for the small business owner: how to quantify your existing customer base and market to them directly using email and SMS texting. United States: M. Weir. Winter, Mick. 2011. Scan me: everybody's guide to the magical world of QR codes-- barcodes, mobile devices and hyperlinking the real to the virtual. Napa, Calif: Westsong Pub. (Design Bloom 2011) Read More