The Impact Of ECommerce On Tesco Plc Information Technology Essay

The Impact Of ECommerce On Tesco Plc Information engineering science EssayIn 1919, Jack Cohen founded Tesco as he began to sell nimiety groceries from a st entirely in the East End of London. On his starting cartridge clip daytime, his profit was 1 with total gross gross revenue of 4. In 1924, Jack exchange his first receive-brand product which was Tesco Tea and this was before the participation was called Tesco. The name comes from the initials of TE Stock well, who was a opusner in the firm of tea suppliers, and CO from jacks surname. In 1929 Jack Cohen opens his first Tesco store in Burnt Oak, Edgw atomic number 18, trades union London. 1932 and Tesco Stores Limited became a private limited ships come with. Two years subsequently in 1934, Jack Cohen bought a spot of land at holy man Road, Edmonton, north London to build a unsanded headquarters and storage wargonho part. It was the first modern food w arho drug ab role in the country and introduced naked ide as for cardinal blood control. Furthermore, in 1947, Tesco Stores (Holdings) Ltd floats on the Stock Exchange with a dower footing of 25p, and in 1956, the first Tesco self-importance-importance- receipts super food market opens in a born-again cinema in Maldon. The list below shows further expansion by Tesco PLC at bottom the subsequent yearsAnnual sales exceed 2 billionCom honkerised check bulge outs introduced into the first Tesco stores1983Tesco Stores (Holdings) Ltd becomes Tesco PLC1995Would I Buy It initiative is launched to stop that products atomic number 18 al looks of the highest quality for nodesTesco becomes the market-leading food retailerTesco Clubcard is launched1996Tesco launches 24 hour occupation1999Tesco enters South KoreaTesco launches a youthful on- describe bookstore and on-line situateingTesco publishes supermarket price comparisons on the internetcc0Tesco.com is launched2004Tesco enters ChinaTesco launches own-brand Fair-trade strayTesco Broadba nd is launchedTesco.com becomes first study British supermarket to enter music xeroxload market2005Tesco exits the Taiwanese market in an asset swap deal with Carrefour involving stores and mathematical operations in the Czech RepublicTesco Home electropositive launchesTesco announces annual profits of 2 billion2006Tesco mold launches2009Tesco launcheswww.tesco.com/c plentifulnesshingClubcard re-launched in the UK with 150 one jillion million million investment offering customers the opportunity to double up their vouchers2010Tesco opens the worlds first zero-carbon supermarket in Ramsey, CambridgeshireTesco opens its first Lifes step mall in Qingdao, China.More k straightledge on the history and progress of the telephoner end-to-end the years clear be seen on the caller-ups corporate website.Here argon virtually common Tesco logos that fuck be seen aroundhttp//t3.gstatic.com/images?q=tbnANd9GcQaFF1G-B2Pd3iXLWuhEoxiXI2BfXEPatERE12y9CX7VSkScZ http//t1.gstatic.com/image s?q=tbnANd9GcS9vEIPDWGJMiMAThPnTWaTjp_LHes8YvMuQ5z_T6EhEzgSlyix http//t0.gstatic.com/images?q=tbnANd9GcQqpNKamt2FQnmOZthlHgFaRLyzlO_oRZDKWZ72QS6agwBy811Jhttp//t0.gstatic.com/images?q=tbnANd9GcTGdVEEIbImv3nFiGQSkonLltz7w77rmlXaaTEEPeMovbxd5iBM http//t3.gstatic.com/images?q=tbnANd9GcTMe4aTQ6V4FOR4f6ULiORWC8nlEBcjLYJ-wu4ATwiFA8VpNt61HOW TESCO employ TO DO BUSINESS.In Tescos early days, as seen from the original operations, grocery products were exchange from market stalls until the first Tesco store was opened in North London in 1929. Then in 1934, the owner bought a plot of land to build a pertly headquarters and a w arhouse and introduced cutting ideas for pennyral bear control. In 1956 Tesco opened a self service supermarket in a converted cinema in Maldon which meant that batch could go in and pick their own items of interest from the shelves and profess their manner to checkout points or tills for payment. Initially, Tescos merchandising operations would digest refer the use of TVs, Radio, newspapers, mail shots and billboards. Then in 1982, reckonerised checkouts were introduced into the first Tesco stores and the play alongs annual sales exceeded 2 billion. Here we substructure see the integration of ready reckonerised operations including the centralised stock control to get a picture of the early stages of e- traffic do its air into the business operations.HOW E-COMMERCE HAS TRANSFORMED TESCOS METHOD OF WORKING.With the integration of computerised systems in operations both(prenominal) at stock control levels, data keister and checkout levels, Tesco launched the Tesco clubcard which allowed customers to earn points from every procure they made. This involved a brief registration of the customers name, send for number and manner of speaking expound and the issuance of a private card precisely this withal meant that the fraternity now had a database of loyal customers and every fourth dimension these separate were utilise by a c ustomer, Tesco could tell what had been purchased in order to guide the points but in the process, the company could practise predictions about plastered goods and items and they could prodigally send in offers and coupons to customers based on what they thought each individual customer would be provoke in, either based on a previous purchase or based on a new product. This greatly allowed customers who had the clubcard to relate to Tesco on an almost personal shop experience, but the underlying factor here(predicate) was in the use of this particular e-commerce employment amongst separate(a)s.Then the company launched of the 24 hour barter in 1996, which at that stage had a lot to do with the application of computerised and electronic methods of operation, in manners that could maximise the readiness of the companys operations from the warehouses to the tills. This involved electronic methods of stock control to assist with constant replenishment when necessary, qua ntify management, use of barcodes, video and radio commercials, coupons and printed flyers promoting the organic range, etc. all told this time, Tesco was as well as busy expanding their supranational branches to as far as Asia and in 1999, the company launched a new on-line bookstore and on-line banking and also published supermarket price comparisons on the internet. Here again we gage see that the companys use of e-commerce is expanding at such a rate that competitors would tolerate had to switch their seatbelts well tight in order to catch up with this titan retailer.In the year 2000, Tesco launched Tesco.com which underlyingally began the all Tesco/internet revolution of shopping online with Tesco for almost every star sign product that the customers needed. With an online platform to advertise and sell products, Tesco.com had made a vogue for the company to deliver its grocery goods and some other services to customers in the puff of air of their own homes and w ithout the need to go to the stores. This was the closest to uttermost toilet facility both for the customers who could now shop anytime and stir their goods delivered at conveniently hold times, and also for the company who could now reach a bulkyr range of deal both heartyly and geographically while at the same time reducing traffic in the stores. Customers could pick from all sorts of products including the free from products intentional for customers with special dietary needs and there was just a wide range of flexibility for the customer regarding the whole shopping experience. Nowadays, the company can be accessed instantaneously via the World Wide weathervane on computers, laptops and purge the mobile phone. Internally, the use of email, fax, databases, computer programmes, intranet and internet has enabled Tesco to maximise its operational capabilities as data can be accessed, processed and sent around big partings within a short period of time. I.e. functions of purchasing, supply, accounts, management, marketing, sales, etc. Below are some Advantages and disadvantages of E-commerce to TESCO.THE ADVANTAGES OF E-COMMERCE.Elderly and disabled customers can shop within the comfort of their homes and all customers vex access to a wider range of providers to choose from thereby enabling customer empowerment.Heightened customer service as customers are enabled to visit detailed learning online, and intelligent agents can also answer measurement e-mail questions in seconds. Also, re mickles posted by other customers about the products purchased on a website can help with decision making for the customer. The use of phone and e-mail has also amend communications amid the company and the customer as queries and enquiries are normally made educately via these mediums.Customers also nonplus a wider product range to choose from as they can view the contents of an entire store without physically walking around it, plus round the clock operat ions online which makes shopping accessible to customers on 24/7 basis.Reduces Time and money fagged as travel time and cost, to and from the store, is eliminated, and with online vendors selling different product ranges at different prices, customers can trulyise a product that best suits their financial and qualitative demands. In some cases, companies testament often offer the same products for less if it is purchased online.E-commerce benefits for the company.Globalisation in terms of product promotion and sales to reach a wider range of consumers.More efficient inventory management and stock control to maximise product availability.Just in Time (JIT) wareho utilize to eliminate localisation of function and availability restrictions thus saving costs for both the company and the customer. corporate image to establish identity and trust which is necessary for direct sales and to affirm the brand image.The use of computerised databases, fax, email, computer-aided designs, int ranet and the internet as a whole has also equipped Tesco with some necessary as well asls for maximising operations and communications. From sourcing and dealings with suppliers of products via email, phone and fax, by to marketing towards in-store and online sales and promotions via Television, radio, electronic billboards, internet sites , and in the end for customer support via phone, email, etc, e-commerce has all told transformed how Tesco works today.THE DISADVANTAGES OF E-COMMERCE.Security and concealing of personal information as a lot of people are still quite sceptical about victimisation their personal bank details for shopping online.Programmes uniform viruses could cause a website to shut down and could also affect customers computers as a conclusion of using the website. crossing quality and delivery of items could be different from what the customer might be expecting.Internet speed and bandwidth in certain areas whitethorn make it tough for customers to us e the website hassle free.Staffing. The more e-commerce improves, the less clement labour that is need to carry out certain tasks and this can cause a lot of human positions to become downsized or rendered totally obsolete which is non lucky to the workers.This has also led to the asset of new skill sets (to cope with new operations) which could mean new staff, new course aims and titles, and in some cases also involves retraining current staff in order to stay up with technological changes and all these have had its financial costs to the company pair with the financial costs of implementing the hardware needed for particular e-commerce- related upgrades. in that location have also been some social costs as a result of e-commerce as there are now new job roles and titles which people have to adapt to via a cultural change. Also, since most items can be exchange online to a much wider audience while deletion the costs of traditionalistic retailing methods, a company does not have to spend so much on an expensive High street presence and this in turn means that the traditional social throng of shoppers is gradually fading away.RISKS INCURRED IN INTRODUCING E-COMMERCE TO THE ORGANISATIONSocial Risks.In addition to the potential loss of revenue that declines in employee productivity can urinate due to certain applications of e-commerce, an inappropriate use of the companys resources can also put a strain on business infrastructure and therefore result in performance and availability issues, causing drug users who are participating in work-related activities to experience a slow down.Information risk is another social risk that is impacted by employee use of company resources for personal reasons. defend information assets from destruction, loss and corruption is an important preventative measure. As employees use the internet for activities such as shopping, social networking and web surfing, the threats to the company information assets are gre atly increased. If employees are using these devices to access personal e-mail accounts or shop online, or are using their work e-mail accounts in relation to shopping, phishing becomes more likely. Phishing can result in more damaging scenarios for trys such as loss of customer data, loss of enterprise intellectual property and damage to enterprise data.Social risks on the part of the customers can involve trust for a company in using their services online, putting out their personal information for transactions on-line, and even a change from the old tradition of shopping to a completely new system of doing things.Unregulated on-line buying could become a significant social problem as e-commerce spreads. The compulsive buying tendencies of certain consumers coupled with their affinity for the Internet is cause for special concern. Beyond inefficiency in markets, there will be social costs from reduced productivity, personal bankruptcies, disrupted families and ruined lives. Chas ing the problem with credit and psychiatric counselling will be expensive both in terms of tax dollars and human lives. By way of prevention, existing fair trade practices prohibiting deceptive promotions and set should be extended to e-commerce. Fortunately, many people rec everyplace from addictions on their own and many more can learn the self-control required to ward off them, with a little help. Software developed within the Internet fraternity could help on-line consumers maintain self-regulation. It could extend bundling by automatically totalling purchases crosswise sites and sessions and provide a offerning on-screen meter of expenditures and time worn-out(a) shopping, to promote self-observation. Automatic filtering of sites, types of products, or product stimuli (e.g., jpg files with product images) that foster excessive purchases would reduce exposure to shopping stimuli. To bolster the judgmental sub-function, shoppers could be prompted to make a shopping list bef ore entering e-commerce sites and receive on-screen warnings when they surpassed referential norms or family budgets. Self-reactions could be prompted by forcing shoppers to re-allocate budgets, relate unplanned purchases to initial shopping objectives or respond to remonstrative e-mails from significant others before completing a purchase.fiscal Risks.All companies face financial risk, even if they only operate via the Internet. E-Commerce companies may face a harder time securing external financing because they may not have a lot of physical assets to use as corroborative or indicate their long-term viability as a company. Banks and other lenders may require a higher level of personal capital social occasion by owners and officers before lending money to the company. Generating a positive workaday cash flow may also be difficult because of the fees involved with website protection, hosting, electronic shopping carts and credit card companies. These fees are required by vendors of E-Commerce companies and cannot be avoided. To mitigate these risks, E-Commerce companies must employ accountants or use a public chronicle firm to control that no internal waste of cash is going on and all expenses are pertinent to the operation of the company.Since there are regulations surrounding data protection, consumer protection, distance selling regulations, etc, the company faces a huge financial risk if any of these aegis measures are breached, and such measures could potentially cause the business to go bankrupt. In general, the hostage systems needed in get into to ensure safety of customer information as well as physical infrastructure of setting up an entire e-commerce system, failure of the hardware and/or software, attack via virus or computer hacker, fire and flooding all poses serious financial risks to the company if the revenue does not meet up with the expenditure used to cook these factors.THE clashing OF E-COMMERCE ON ITS CONSUMERS.E-commerce has completely changed the way people look at making purchases and spending their money. It has certainly had some positive as well as negative impacts on the consumers. The Tesco system has been active in making sure that the consumers experience the positives while almost making the negatives non-existent.This system of commerce has affected consumers in the way that many people can now do most or all of their shopping on-line and within the comfort of their homes or anywhere with a computer and internet connection. This can especially come bridge playery for people with very busy lifestyles, the old or disabled people. This has translated as a kind of empowerment as people can make purchases round the clock and even have their goods delivered at suitable times as well. Also, customer service with e-commerce has enabled consumers to have access to a wide range of specific and detailed information about their goods and purchases online. Intelligent agents can answer standard e-mail q ueries in record time and the use of help desk software allows human sharp services to be expedited with minimal stress.Consumers can now also make use of a service that allows them to fully customise their products and services in contrast to buying in a store where products are usually merely standard. E-commerce has also allowed people who would otherwise not be interested in the physical side of applied science to have somewhat basic ideas of the systems they need to operate in order to make use of the e-commerce systems which in turn is a kind of education in terms of having that new knowledge of how things work.In the case of the Tesco club card, consumers have been greatly impacted as they feel a personal connection with their retailer of superior that seems to give something back in the way of points and also make relevant offers based on previous purchases or potentially relevant products.All in all, from the stores using electronic check-outs, centralised stock control, etc to the website where consumers just place their orders and wait for delivery to their doorsteps, e-commerce has had a generally positive impact on its consumers.HOW TESCO MET THE CHALLENGE OF NEW TECHNOLOGY.IT systems have contend a key role in helping Tesco deliver strong profits. The Tesco website, in which it has invested heavily in during recent years, saw profits leap by 21 per cent to 48 million, on the back of an almost equal percentage sales rise. Online grocery orders have lifted by 10 per cent to 7.5 million. The company has always been ahead in embracing and implementing new technology with an open-minded and optimistic approach despite the social and financial challenges. Advanced in-store queuing systems had modify shopping for 26 million of its customers by reducing checkout lines, Tesco verbalise. The supermarket grasp is using heat-sensing technology to monitor lizard lines at tills. It also said improved scanners, better self service tills, and checkout ca meras were helping it reduce queues. self-service checkouts now account for a fifth of all of Tesco transactions. The supermarket took steps in 2008 to ready its technology for the Christmas sales peak, implementing ExpeTune performance management software from big 4 to manage its mainframe servers. Tesco has invested heavily in IT over the years, and this has played a strong role in improving sales, the supply chain, and efficiency across the company. The company has an in-house designed supply chain application, running on IBM system p servers based on UNIX. The companys five-year old warehouse in Croydon, which serves south-east London customers only and was also the companys first dedicated online hub, became advantageous in 2008. The warehouse handles orders with a value of over 1 million per week. Sales in non-food business Tesco Direct increased to 180 million from a virtual standing start. The business, which is part of Tescos general merchandise division and has 11,000 it ems for sale online, had start-up costs and initial operating losses totalling around 25m this year. Tesco said it is aiming to absorb these losses. Launched in 2006, Tesco Direct experienced IT problems that reportedly delayed its opening. The supermarket giant has 3,000 staff working at its offshore site in India, providing IT and administrative support around the world, including the recently launched US operation Fresh n Easy. The Indian site provides software ontogenesis, as well as accounting and payroll services. Tesco also has a long running application development deal with Steria-owned outsourcer Xansa, oriented at ensuring its systems are up to date and in line with business needs. In store, Tesco continued to benefit from thermal imaging technology at checkouts, which speeds up queues and helps the store manage the flow of people and direct them to other tills. The company has a one in front policy, gist that if more than one customer is in front of anyone at a checkou t it aims to open another till if one is available.Outsourcing and partnerships are other ways in which Tesco has been able to meet new technological challenges. In the case of their energy consumption, Tesco has outsourced the monitoring and regulation of this function to the HSE group to contact the targeted reduced energy and carbon emissions by monitoring the plant and systems installed to ensure that they run and operate at their optimum. Their scope of services include thrust monitoring, Plant performance, direction information, System improvement, Minor works and Maintenance. Their key objectives were To monitor the performance of new technologies, To provide feedback on plant and system performance, Management information is provided in a usable format and on a timely basis, Incremental improvements that will contribute to ongoing savings are identified and implemented, To be able to share findings from system performance, technologies and innovations.We have learn from our experience that there is often a frustrating gap between being able to identify the technology that is needed whether on low-energy sparkle or lower-emissions refrigeration and being able to purchase and apply that technology commercially. We will work with our suppliers to reduce and hopefully eliminate this gap. Sir Terry Leahy (former CE0 of Tesco Plc).With the pace of consumer technology rapidly developing, Tesco now stocks an increased range of electrical products in-store and online. Responding to consumer demand, the retailer introduced Tesco Tech Support in 2008, making friendly faces available to expertly answer consumer technology queries, guiding them to choose the right product. Continuing to grow, the service now has more than 1000 expert advisors across the UK at 200 Tesco Extra stores and a dedicated UK call centre. The new http///www.tescotechsupport.com website was created by an in-house aggroup at FuturePlus. The site supplements dedicated online editorial content with all-new how-to tech videos fronted by Tesco Tech Support employees.THE SECURITY ISSUES IT ENCOUNTERED.TECHNOLOGICAL ISSUES.Some of the technological security issues the company encountered include the following which could have had disastrous effects on the organisationUser authentication A user name and war cry combination, where the password can vary in length and include total and characters. Remember to include a system that prompts employees to change their passwords at uninterrupted intervals.Viruses A computer virus is a bug that affects your computer in many ways, it can come from almost any source like disks but mostly from the internet or emails, it can copy itself and warp a computers files. It can alter or even destroy company computers and also the computers of users who log on to such services. By installing anti-virus protection, the company can protect against viruses from affecting the computer.Firewalls and performance Effectively, installing a fir ewall can slow down the computer depending on what it does, and where it came from. Firewalls are programs that monitor traffic, which is the entryway and outgoing data communication that takes place when the user is online. The software needs to be configured to permit or deny communication with websites, as chosen by the user. In general, once configured, there is no real impact on the performance of websites, but it can take time to set up the relevant permissions between the site and the users computer.SSL (secure sockets layer) and HTTPS A prevalent implementation of public-key encryption is the Secure Sockets Layer (SSL). Originally developed by Netscape, SSL is an Internet security communications protocol used by Internet browsers and Web servers to transmit sensitive information. SSL has become part of an overall security protocol known as Transport Layer Security (TLS). Https is not a separate protocol, but refers to the combination of a normal HTTP interaction over an en crypted Secure Sockets Layer (SSL) or Transport Layer Security (TLS) connection. This ensures logical protection from eavesdroppers and man-in-the-middle attacks.RSA Certificates A digital signature is basically a way to ensure that an electronic document (e-mail, spreadsheet, text file, etc.) is authentic. Authentic means that the user knows who created the document and you know that it has not been altered in any way since that person created it. Digital signatures rely on certain types of encryption to ensure authentication. Encryption is the process of taking all the data that one computer is sending to another and encoding it into a form that only the other computer will be able to decode. Authentication is the process of corroboratory that information is coming from a trusted source. These two processes work hand in hand for digital signatures.FINANCIAL ISSUES.Prevention of Hacking and Identity stealing Identity theft is when a hacker gets through to a users computer via a virus and acquires their personal credit card details, and then uses the details for their own personal use. Hackers get in to the computer system through ports, when the ports are open the hacker can get in, this may be with viruses or other means, users can stop hackers by installing a firewall onto the computer which blocks off the ports so hackers cant get through.Payment systems using payment cards online has always given cause for concern as the information contained in them is quite delicate. The introduction of services like PayPal have ensure that consumers have a reasonable amount of confidence in using online service that require some sort of payment for products or services.PHYSICAL ISSUESPhysical issues include factors like access to both company and customer information by employees through mediums that make it all too easy to tamper with, destroy, or steal such sensitive information.HOW THE ships company TOOK ADVANTAGE OF NEW DISTRIBUTION AND SALES CHANNELS.With the integration of computerised systems of data bear on and communications, the company had expanded their capabilities in the area of sales and distribution. Products could be sold through channels like the Television, on radio, on billboards, via email, via the internet and classify websites, flyers, coupons and even by text on mobile phones. Tesco used all their available resources and avenues to make sure their products were available to a large consumer base both locally and internationally. The application of call centres which made use of numerous phone and computer systems meant that the process from marketing to sales could be run by a unit of dedicated employees.Tescos distribution network in the UK was among the best in the world. The company emphasized the importance of putting resources to the maximum use. Tesco stores in the UK received two deliveries a day one a fill up delivery and the other, a top up delivery. To keep the things simple for customers as well as for emp loyees, Tesco adopted several new systems such as electronic shelf edge labelling all across the store, through which prices could be changed from a single central point self scanning tills self service pre-packaged products, coffee shop on mezzanine floor floor and also merchandising of fresh produce. Things like next day delivery and named day delivery have also been effective in maximising the use of these new sales channels. For existing customers, email marketing and direct mail marketing to provide special offers and promotions to customers is important. According to Humby (2003), e-retailer Tesco.com use what he describes as a commitment-based segmentation or loyalty persist which is based on time of purchase, frequency of purchase and value which is used to identify 6 lifecycle categories which are then further divided to target communicationsLogged-onCautionaryDevelopingEstablishedDedicatedLogged-off (the aim here is to win back)Tesco then use automated event-triggered me ssaging can be created to encourage continued purchase. For example, Tesco.com has a touch strategy which includes a eon of follow-up communications triggered after different events in the customer lifecycle. In the example given below, communications after event 1 are intend to achieve the objective of converting a web site visitor to action communications after event 2 are intended to move the customer from a first time purchaser to a regular purchaser and for event 3 to reactivate lapsed purchasers.THE IMPACT OF E-COMMERCE ON THE BUSINESS.Selling through websites is the fastest growing method of handicraft worldwide. There are two main forms of e-commerce tune to business (B2B) trading where companies trade and exchange information using the World Wide Web. Business to consumer (B2C) trading where companies deal directly with customers through web pages, and ordering is carried out online.Trading online enables businesses to reach much wider audiences while cutting the costs of traditional retailing methods. For example, an e-tailer does not have to spend so much on an expensive High Street presence. Although the outlay on developing a good website is substantial the potential benefits can be enormous.There have been impacts on direct marketing where promotion of products and services have been enhance through direct, information rich, detailed and interactive contact with consumers. The cost of delivering relevant information and digitized products to customers over the internet is results in substantial savings to the company when compared with traditional methods of delivery.The process of delivery, cycle times, administrative work and time spent on other fu