Developments of information and communication technology from past decade have seen an expansion of the role of information system in business organization. The most crucial aspects of this expansion have been the application of information system as a strategic tool and as a mean of delivering new product and services through the internet. Information system can act as enablers and catalysts for strategic changes in company. In addition information system play vital role in the planning and execution of organizational strategies. In other hand, effective information management helps to meet the ultimate objectives of a particular organization which can be cost leadership or differentiation or profit maximization. Information system provides relevant information to produce appropriate strategic decision which is crucial to achieve strategic objective.
This study is based on Tesco Plc, one of the leading global retailers and the UK's biggest retailer as well as third largest grocery retailer in the world operating across Europe, North America and Asia. It operates 4,331 stores throughout the world with more than 470,000 workers to meet the requirements of modern market and it is not limited with its usual product range of grocery and general merchandise, it has diversified its business with electronic goods, clothing, banking and insurance services and equipment. Tesco is moving towards 'one stop shopping' which means customers can get all purchasing requirement from one place. Tesco has also expanded its customer its customer base through online by the help of tecso.com and tesco.net website which attracts more than one million regular users.
The main focus of this study is to align the information management system with corporate strategy of Tesco. In this technological era, no enterprise will be successful without a solid, integrated strategic plan directed by a clear vision and supported by a strong information management system which is crucial to produce effective decision.
This study has got five separate sections. The first part is introductory part which identifies and justifies the objectives of the study. The second part explores the impact of management information on decision making, third part explains the importance of information sharing within Tesco, forth section discusses how to use information to inform and support strategic decision making. The last section is about the monitoring and reviewing management information.
Identifying the feature of data and information.
No organization can be survived without a solid, integrated and regularly reviewed strategic plan directed by vision of the enterprise and the fact is that without relevant information no strategic leader can produce strategic plan to run business smoothly. And another thing is that information is derived from processing of data.
Generally, data refers to quantitative and qualitative attributes of a variables or set of variables and data is also the representation of a fact, figure and idea about events. In the other hand, data is raw which is taken as the lowest level of abstraction from that information and knowledge can derived. By adding value via context, calculations, corrections, categorization and consideration data can be convert into information using an information system. Data gives little value to decision maker in its current from because of this type of data.
Information refers to the organized or processed data which is meaningful and contextually relevant that helps to managers in effective decision making process and answer question about operational process. To manage and communicate information around organization information technology play vital role in context of accessibility, relevance, comprehensibility, timeliness and accuracy, these are also known as the features of data and information.
Accessibility: Accessibility focus on easy assess of information. Managers should know that information exists and the way of obtain it and in some context, they may need to take specialist help to obtain the information. Information technology can be cornerstone to facilitate speed of access and the amount of information which is accessible.
Relevance: Information must be relevant which only possible if the management information have been sifted and packaged into an effective format. It can be helpful in effective decision making process if the information is concise but must always be complete.
Comprehensibility: Comprehensibility focuses on understanding of the management information which should meet the requirement of decision maker. If there are any deficiencies in this area, there will be question mark in quality of decision made with the management information.
Timeliness: It talks about the time period between the request and receipt of information. Manager should receipt information in right time because any delays may bring gap in the relevance, comprehensibility and accuracy of the management information which directly affect quality of the decision.
Accuracy: Accuracy is the measure of gap between the manager's perception of the state of a variable and the real state of a variable of management information. Information must be accurate to produce effective decision which is linked with timeliness because time factors may introduce errors.
Determining the criteria to be applied when selecting data and information to support decision making.
Without appropriate data and information no strategic leader can make effective decision to meet the strategic ambitions. So, there should be certain criteria to select data and information. In context of Tesco, they can use different criteria. To select data they should keep in mind the accuracy, completeness, validity, consistency of data. Inaccurate data produce wrong information which gives wrong decision which may lead organization towards downturn. Furthermore, incomplete, invalid and inconsistent data produce no worth in effective decision making process because data should be full and solid information about subject matter which is needed to make decision and it should assurances about timing, reliable resources. Hence, only accurate, complete, valid and consistent data that support the decision making process.
Likewise, to select information strategic manager should consider quality of data, definition clarity, relevance, presentation, timeliness, availability of information. Only quality data produce precise information. Here quality data refers the accurate, complete, valid and consistent data. Furthermore, information should define clearly to the relevant subject matter of decision. Irrelevant and undefined information may cause of improper decision. Information should available to relative subject matter of decision making in right time. Otherwise that information won't worth in decision making process.
Evaluate the impact of a management information system to an organization:
Management information system (MIS) is a system to convert data into information and to communicate that information in an appropriate from to manager at all levels in all function to enable them to make timely and effective decision. Hence, MIS produce an impact on the company's functions, performance and productivity. The impact of MIS on the function is in its management. By the help of good MIS Tesco's management of production, marketing, finance and personnel becomes more effective and efficient and the tracking and monitoring of the functional target becomes easy. The MIS creates another impact in Tesco which relates to the understanding of the business itself.
Since, the goals and objectives of MIS are the product of corporate goals and objective, its helps indirectly to pull Tesco in one direction towards the corporate goals and objectives by providing the relevant information to the people in Tesco.
Tesco is dependent on efficient management information systems. Any significant failure in the MIS process of Tesco's retail operations (e.g. barcode scanning or supply chain logistics) would impact its ability to trade. Tesco recognise the essential role that MIS plays across its operations in allowing us to trade efficiently and achieve commercial advantage through implementing IT innovations that improve the shopping trip for customers and make life easier for employees. Tesco have extensive controls in place to maintain the integrity and efficiency of its MIS and it share systems from across its international operations to ensure consistency of delivery.
Hence, MIS produce impact in functions, performance and productivity.
2.1 Determining the legal responsibilities in sourcing, sharing and storing information
In order to regulate management information system, organization should follow some provisions imposed by government to meet legal obligations. Organization should meet the legal responsibilities while sourcing, sharing and storing information. If the organization used invalid source, way of sharing and system of storing of information then there may arise legal conflict. Mainly, Data Protection Act, 1998 and UK Data Protection and Privacy (Direct Marketing) Regulations 1998 have set the certain legal obligation to the organizations in obtaining, holding and storing information. This is an act set provision for regulation of the processing of information relating to individuals, including the obtaining, holding use or disclosure of such information. According to this law the information must be:
processed fairly and lawfully
obtained for specified and lawful purposes
adequate, relevant and not excessive
accurate and, where necessary, kept up-to-date
not kept for longer than necessary
processed in accordance with the subject's rights
kept secure
not transferred abroad without adequate protection
According to this law company must set their own privacy policy and terms and condition with norms of this law. For this, Tesco also has set its own privacy policy and terms and condition with user to address legal obligations. Tesco is committed to protecting consumer privacy. Tesco will not collect any personally-identifiable information about you (that is, user name, address, telephone number, or email address) ("personal data") unless user provide it to Tesco voluntarily. Tesco will use user information to provide and personalise Tesco service and to detect and prevent fraud. Tesco also use user contact details to communicate with user. Consumer information may be passed to and used by all Tesco companies. Tesco will never pass user personal information to anyone else, except where Tesco is required or permitted to do so by law, for any successors in title to its business and suppliers that process information on Tesco's behalf both in the UK and abroad. Tesco may also use and disclose information in aggregate (so that no individual customers are identified) for marketing and strategic development purposes.
There are other laws to protect copyright and software protection i.e. UK Copyright (Computer Software) Amendment Act 1985 and Copyright Designs and Patents Act 1988. According to these laws it is illegal to copy proprietary software, be it source or object code onto another disk or load it onto a computer hard disk without specific permission from the owner.
Likewise, the UK Computer Misuse Act 1990 prevents hacking and viruses offence. According to this law hacking and the introduction of viruses is a criminal offence. The companies are also responsible for avoiding spamming.
Tesco is committed to address these legal obligations while obtaining, holding and storing information because violation of these rules may cause several thousand pound penalty and many other consequences.
2.2 Discussing when information should be offered and access allowed
To offer information to the concerned parties, there should follow certain and specific process otherwise information offering would be affected in one or another way. Whilst Tesco use reasonable endeavours to ensure that the contents of this Site are accurate and up to date it does not accept any liability for any information which may not be accurate. Tesco is reliant upon third parties for much of the information provided and reserves the right to change data, references and product specifications at anytime.
The contents of Tesco site are for general information and public relations purposes only and do not purport to provide advice, make any offer or otherwise create or lead to the creation of any legally enforceable relationship between Tesco and user. No reliance should be placed on any statements made on the site, whether for investment purposes or otherwise. Tesco excludes to the fullest extent permitted by law all liability resulting from user access to the site including (without limitation) any loss, (financial or otherwise) or damage resulting directly or indirectly from any such reliance. Tesco accepts no liability or responsibility whatsoever for any other web sites which may be accessed through the Tesco site.
Tesco has set special provision for screen reader, voice browser and screen magnifier users, partially sighted users, colour blind users and keyboard only users for fair process and to line process with person's right. Tesco is offering information with secure and lawful process.
2.3 Evaluating the formats in which information can be offered
Organization can offer information in many formats which may vary organization to organization. Organization can use different formats such as electronic/manual, list of individual, libraries, folders, documents, list item inside the lists, list items present in the libraries.
As other organization Tesco is offering information in different format. Tesco store and manage more information in electronic format (i.e. PDF format, XML format, HTML format), the concern over protecting individual privacy becomes more acute. Storing information in electronic format becomes more accessible and more easily cross referenced with other electronic database. Electronic database make it easier for Tesco to share information. This ability to assemble information can increase the efficiency and integrity of Tesco's services. Tesco can store and share information on the basis of individual lists which may contain by favourite product, by nature of customer. For this Tesco is using club card which helps Tesco to improve its customer service and make communication more relevant.
3.1 Analysing information to identify patterns and trend
In this competitive business era to be successful company needs to be up to date about trend and patterns of market, competition, state of the economy, legislation development, changing consumer behaviour. By the help of environmental scanning company can determine these trends. Tesco can analysis sales data, stock exchange rate to determine market trend where market is heading? By benchmarking market share, competitor's sales figure, profitability, price it can determine level of competition to be better among competitors by exploiting competitive advantages. To operate business smoothly Tesco need to know state of economy weather it is booming or in recession which can be identified by analysing economic growth, unemployment rate, customer spending behaviour etc. Moreover, there may some change in legislation proposed by government which can affect the day to day business activities so company need to analyse legislation trend. Analysis of changing consumer behaviour is key concern of modern business to retain customer and gain their loyalty. To analyse consumer behaviour Tesco is using club card to determine customer demand.
To study these trends manger need appropriate and sufficient information which discussed above. Information system helps to deliver such information.
3.2 Evaluating the range of decision making tools and techniques available to support a strategic direction.
In order to lead organization towards strategic direction, manager should produce effective decision. To produce effective decision or improve quality of decision making there are various tools and techniques available for decision making process which contribute in achievement of strategic direction such as SWOT analysis, critical success factor, model driven DSS, Data driver DSS, data mining etc. However, this study is going to evaluate the model driver DSS and data mining two model which is applicable for Tesco.
Model driver DSS:
A decision support system (DSS) is a computerized information system, designed to support business decision making activities to improve quality of decision. Gorry and Scott-Morton (1971) defined DSS as interactive computer-based systems which help decision makers utilize data and models to solve ill-structured problems. A well designed DSS is crucial in compiling useful information from raw data, documents, personal knowledge and business models to solve problems. It allows decision makers to perform large numbers of computations very quickly. Hence, advanced models can be supported by DSS to solve complex decision problems such as emergency situations, where quick responses are often required. DSS can retrieve process and utilize data efficiently to assist decision making.
A model driven DSS highlight creation and manipulation of statistical, financial, optimization or simulation models. The linear programming based optimization model is one of the most wide used DSS models. Model driver DSS require decision makers to specify model parameters according to their decision problems. The output of the model is used to assist decision makers in assessing their decision alternatives.
Model driver DSS allow manager to assess quick information to produce quality decision which contributes in strategic direction.
Data mining:
Data mining is a processing technique to extra hidden patterns from data of interest, in order to provide decision makers 'knowledge' for making. In other hand, data mining deals with the process of analyzing, data from different prospective and transferring it into constructive information which helps to bust revenue and cut down cost. For data mining, there are different software are available as a analytical tools for analysing data which allow decision maker to analyze data from different dimensions, categorize it and summarize the relationships identified. From the technical prospective, it is the process of finding correlations or patterns among various fields in large relational databases.
Fundamentally, Tesco is using data mining with a strong customer focus in retail, finance, communication and marketing which enable Tesco to determine relationships among internal factors (i.e. price, product positioning, staff skills etc.) and external factors (i.e. economic indicator, competition, customer demographics etc.). It also enables Tesco to determine the impact on sales, consumer satisfaction and profit. Finally, it enables company to drill down into conclusion information to view detail transactional data. With data mining, Tesco could use point of sales records of customer purchase to send targeted promotions based on an individual purchase history. By mining demographic data from comment Tesco could develop products and promotions to appeal to specific customer segments.
3.3 Determining source available to assist in analysing data information
It is crucial to analyse data to produce quality information to support effective decision making process. To analyse data information it may requires resources, mainly three resources are available within Tesco i.e. information resources, technology resources and resources available.
Information resources: Information resources contain data, information, and knowledge. Basic resource of data information analysis process is data that is input of this process. Data refers to the unorganized and unprocessed facts, static, a set of discrete facts about events. Once data has been processed it becomes information that makes decision making process easier. Finally, knowledge is derived from information in the same way information derived from data, it is person's range of information.
Technology resources: Software applications, system software, technology infrastructure, hardware, telecommunications come under this resources.
People resources: People are the only one living resources of the organization who can operate other resources. People resources include employees, customer, suppliers and government.
4.1 Identifying methods of evaluating management information within organization
It is crucial to evaluate management information weather it is worth doing or it needs any development to increase quality of decision making in order to achieve strategic objectives of an organization. There are some means to evaluate management information such as data governance, management information values etc. To evaluate management information within Tesco it may use data governance and management information values.
Data governance:
Data governance is a process focused on managing the quality, consistency, usability, security, availability and ownership of information. Indeed, information system cannot be properly integrated, deployed and managed without sound data governance solutions no matter what technology they use. The main objective of data governance is to create a framework aimed at continuous data quality measurement and improvement. This framework contains organizational structures, policies, processes, procedures, mandate management and administration and business rules affecting data quality. Once data governance is established, data stewards must assume accountability for corporate data and manage it as a valuable asset.
To set data governance framework, it requires organizational structure and commitment. Specifically, Tesco has to set up a dedicated group that would work in close cooperation with business, operations, and technology groups. The responsibility of that group should be to establish, maintain, and oversee policies security and availability of data within Tesco. Policies and procedures developed by the group must be reviewed frequently to ensure compliance with changing regulations.
The group must work closely with the technology organisation in defining a service-level agreement that determines system performance, access controls, information latency, downtime window requirements, references code definitions. The group should have a strong and holistic understanding of business operations and processes, especially the business process that requires improvements.
By the help of data governance Tesco can ensure consistence use of information and increase ability to use of timely, reliable and trusted information to drive the business that improve the quality of business decision making.
Management information value:
Management information value explores value by examining against attributes, taking in to consideration the decision making process and keeps eye on timelines, content, format and cost of the information system. Timeline talks about the time period between the request and receipt of information. Manager should receipt information in right time because any delays may bring gap in the relevance, comprehensibility and accuracy of the management information which directly affect quality of the decision. Information should content relevant component with in appropriate format which is easy to assess and understand. Furthermore, management information system should be cost efficient to produce better financial performance.
4.2 Discussing process for analysing impact of information on strategic decision made
Information plays vital role in effective decision making process. To examine impact of information on decision it need to audit the impact of decision implementation. Tesco stands the vision with creating the value for customer, to gain their lifetime loyalty. The strategic objective of Tesco is to expand business aggressively by developing diversified retail service such as banking and finance, telecoms and tesco.com inside the UK and outside the UK as well. It also focuses on the core UK business and strengthens of non food retailing. To achieve strategic objectives manager should produce effective decision.
4.3 Determining methods of developing information capture to inform and support strategic decision making
Information capture relates the process of gathering accurate data from paper documents, forms and e-documents, translating them into accurate, retrievable digital information and delivering them into business applications and database for effective decision making process. Mainly, there is two methods in use for developing information capture to support effective strategic decision making process i.e. Data, Information, Knowledge, Action, Results (DIKAR) Model and Artefacts Skills Heuristics Experience Natural talent (ASHEN).
DIKAR model describes the transformation of data to information which in turn becomes knowledge leading to actions taken by manager which produce business results. It helps to analyze sequence of knowledge management, here, knowledge management relates to how information is stored, retrieved, communicated and shared in an organization. Knowledge management is the application of expert opinion, skills and experience to data and information for decision making. This model provides useful tools for understanding the development of information quality. Within this model the more sequence is that data derives the process but manager could start with results and deduce what knowledge will be needed to achieve them. This falls into two categories: knowledge as a body of information, which mostly can processed by suitable database software and resides the 'data' end of the flow and knowledge as know how, which require more sophisticated 'people management' and is found at action end.
Business
View
IS
View
DATA
INFORMATION
ACTIONS
KONWLEDGE
RESULTS
Figure: DIKAR Model
Source: Adopted from Venkatraman and Henderson (2000)
Above linkages represent the activities by which the value is increased, typically including procedures, systems, processes, organizational structure, administration, skills. In diagram left to right linkages defined the procedures and the extensive application of technology for data processing and the provision of information to the business. This helps to improve quality of decision making.
Another Approach of developing information capture is ASHEN. This model works as a means of providing a linguistic framework both to help organizations identify what they know and to move directly to action as a result of the meaning provided by the language. It helps to prevent the need for argument about the management of its outcome. The mnemonic form facilitates consistent use in this field. The five component of this model are:
Artefacts: a product of human art and workmanship
Skills: practical ability, expertness, practised ability, facility in doing something, dexterity
Heuristics: serving to find out or to stimulate investigation, serving to discover
Experience: actual observation or practical acquaintance with facts events, know resulting from this
Natural talent: special aptitude, faculty high mental ability based on the innate moral sense, instinctive.
Conclusion:
Information system is integration of data collection, creation, storage and distribution of information. In this competitive business era there is vital role of effective information system aligned with strategic objective in decision making process to be successful. Tesco has effective information system which is contributing in company's success.
