Managing Information and Technology - Essay Example

?Managing Information and Technology This essay intends to analyse the role of information technology (IT) in the contemporary business scenario. Contextually, the essay will also include providing a comprehensive understanding about the viewpoints of Nicolas Carr, where he depicted that IT does not matter in business. This viewpoint of Carr can be analysed by taking into concern the role of IT in Tesco PLC. It has been noted that IT is used in various sections of the businesses and its significance cannot be ignored. This aspect can be supported from the fact that Tesco is involved in the implementation of IT in various domains of its business. In-fact, the operational efficiency of the company largely owes due to the application of advanced technologies in its various operational sections. Hence, owing to this aspect, the statement or the assumption of Carr can be contradicted up to a larger extent. Table of Contents Abstract 2 Introduction 4 Company’s Profile in the Industry 5 Competitive Environment of the Global Retail Industry (Porter Five Forces Analysis) 6 Bargaining Power of the Buyers 7 Bargaining Power of the Suppliers 7 Threat of New Entrants 7 Thereat of Substitutes 8 Intensity of Rivalry 8 Role of Information System in Tesco PLC 9 Analysis and Conclusion 11 Analysis 11 Conclusion 13 References 15 Introduction In today’s business scenario, the success and failure of any sort of business depends mainly upon various deciding factors that impose considerable influence on the operations. These factors may be related to customers’ perceptions and their level of satisfaction among others. These are often regarded as major determinants of the overall organisational success. In this regard, the role of information technology (IT) has become quite crucial, acting as a major element in enhancing the operational efficiency of the business. Observably, it is evident that with the changing nature of the modern day business, technology has become quite mandatory to be adopted for business organisations in order to gain superior competitive position in the business market and ensuring long-tern sustainability in this competitive landscape (Tsai, 2003). However, Nicholas Carr holds dissimilar viewpoint in this regard altogether. According to him, technology is of little importance in the business. It is one of those elements, which is extensively available and any company can adopt the same. Hence, it cannot be regard as a tool to gain competitive advantage. To analyse this statement of Carr in an in-depth manner, this paper will evaluate the role of IT in organisations with the help of taking an organisation named Tesco as an example. Accordingly, the statement of Carr can be contradicted or supported on the basis of the analysis made over the organisation. Company’s Profile in the Industry As per the discussion of Nicholas Carr, the presence of information technology (IT) in business does not make any difference in the overall performance of the business. According to Carr, this is owing to the fact that IT is easily accessible for each and every company in their operation and hence it cannot be implemented as a tool for gaining competitive advantage. In order to get a comprehensive understanding in this regard and analysing the statement of Carr, considering the example of Tesco will be quite vital. Tesco is regarded as one of the leading grocery and merchandise retailers throughout the world, which has its operational headquarter in the United Kingdom. In terms of profit earning, the company is regarded as the second largest operator of the world next to Wal-Mart. It has widespread operations throughout the world and it performs various operational functions in a large scale. In the present day context, the company possess greater percentage of market share in the global retail industry. The large scale operations of the company can be apparently depicted from the fact that it currently employs more than 530,000 people all over the world. Observably, one of the major reasons for the success of the company is the execution of certain effective strategies, intending to provide high quality products or services to the customers ([1] Tesco, 2013). It is worth mentioning that Tesco was once regarded as one of the most visited supermarkets in the world, but in recent times, things have been changed considerably for the company. Its operational efficiency has declined owing to certain issues that faced by the company. The issues eventually harmed the reputation of the business in the overall retail industry and is indeed a matter of concern for the same. According to a recent survey, customers in the UK market believes that other players in the retail market of the UK has better reputation as compared to that of Tesco, at-least considering the recent performance of the business (Brand Republic, 2012). Furthermore, according to Butler (2013), in the present day context, the reputation of Tesco has been shifted considerably, which can be seen from the current profit level of the business that declined substantially in the last 20 years of its operations. Furthermore, the reputation of the company also hampered in recent times, owing to the result of its poor performance in the US business market. Apart from this, the pricing strategy of the company, which is regarded as one of its major competitive strengths has lost its effectiveness over the years up to a larger extent. The image of the company in the retail industry has further stained owing to certain critical issues that it faced concerning ‘horsemeat scandal and strawberry mis-selling’ among others. All these aspects assisted in deteriorating the competiveness and the brand reputation of the company in the global retail industry (Butler, 2013). However, the management team of the retail organisation is coming up with certain effective measures that are expected to enhance its operations in future. Competitive Environment of the Global Retail Industry (Porter Five Forces Analysis) Similar to other industries of the world, the retail industry is also immensely competitive owing to the presence of huge number of emerging and existing players in the respective industry. In order to obtain a comprehensive understanding about this particular aspect, Porter Five Forces Analysis will be vital to consider. The analysis has been done in the following section. Bargaining Power of the Buyers The first force depicted by Porter with regard to analyse competitiveness of a particular industry is buyers’ bargaining power. In the retail industry, the customers usually prefer to obtain good quality products rather than low price products. However, this does not impact their behaviour of bargaining. It is believed that, owing to low switch over costs, the loyalty of customers in this particular sector is quite low. Hence, due to the presence of huge number of players, the buyers’ bargaining power in this particular sector is apparently high. However, companies like Wall-Mart and Tesco is deemed to get less affected from this aspect as they already possess a genuine pricing strategy wherein customers have little scope or need to bargain (Kneer, 2009). Bargaining Power of the Suppliers Suppliers’ bargaining power in any particular industry is also another crucial aspect, which depicts the competitiveness of the same. Accordingly, in relation to the retail industry, suppliers have the scope or the possibility to exert their power of raising the price of the goods or providing materials of low quality to the players. This enhances their bargaining power as the aspect can be threatening for the operations of the firms functioning in the particular sector. However, big players like Tesco and Wal-Mart have their regular handpicked suppliers, with which they maintain a commendable relationship, further controlling their power of bargaining (Kneer, 2009). Threat of New Entrants Like in any other industry, the threat of new entrants in retail sector is also quite considerable especially to the small players operating in this particular sector. However, for the big and the reputed players, the threat concerning the new entrants is quite limited owing to their economies of scale. Notably, big players in the industry can provide products to the customers at a quite low price owing to their large volume of production, which is not possible for a new player entering into a business market (Kneer, 2009). Thereat of Substitutes Availability of substitute products in the respective markets can be duly considered as one of the biggest threats for any business. Notably, the retail organisations of the world sell products to the customers that are quite easily imitable by other companies. However, this aspect only affects the small players in the industry rather than the big players who offer effective customer services and deliver high quality products to the customers that cannot be copied or imitated (Kneer, 2009). Intensity of Rivalry Competition in retail industry can be viewed as quite fierce as there are various players selling similar sort of products to the customers. Moreover, with the passage of time, entry of new players in a continuous manner is also augmenting the aspect of competition up to a considerable extent. Furthermore, with the presence of various well known and reputed players like Wal-Mart and Tesco, the intensity of rivalry broadly exist in the respective industry (Kneer, 2009). Role of Information System in Tesco PLC It is evident from earlier discussion that Tesco is one of the most renowned players in the retail industry. It has its operations spread in various regions of the world. However, in recent years, the operations of the company have been viewed with certain setbacks owing to which its reputation has effected considerably. Observably, the company ought to implement effective strategies in order to ensure that it can be able to reacquire its position and brand image in the markets where it operates. Contextually, effective implementation of information technology (IT) or information systems might be one the approaches, which can yield positive results for the business of the company. Contradicting with the viewpoint of Nicholas Carr on the use and importance of IT in organisations, Tesco is viewed to be extensively implementing enhanced technologies along with advanced information systems in its operational activities over the years. At Tesco, technology is the heart of the operations of its business, which is intended towards enhancing the shopping experience of people all over the world (Tesco, 2009). With the intention of enhancing or strengthening supply chain procedure, the company has launched a new and advanced extranet, enabling the company to share information with its various suppliers situated in diverse locations. Though the information that is to be shared with the suppliers via extranet is quite confidential, the company realises that with the changing scenario of the modern day business, standalone business is indeed quite a risky approach. In the changing business scenario, the company believes that in order to ensure effective operational performance, proper communication throughout the supply chain procedure is quite crucial. Hence, companies should intend to work in a collaborative manner and ensure a win-win situation towards the attainment of organisational targets (Marketing Week, 1998). It has been viewed that Tesco implements the technology of ‘BT’s Cloud Contact solution’ in order to develop its interaction made with the customers. Observably, the company has adopted this technology especially for its UK operations in order to ensure that the customers in this particular market are able to acquire more enhanced, flexible and responsive services from the stores of the business. The BT cloud nine technology has the ability to handle approximately 90 million minutes of calls of the customers in one year. Furthermore, the technology is deemed to be quite effective in assisting the customers to meet with their respective requirements. Additionally, the technology will change itself accordingly as per the changes in the business or the overall retail industry in order to deal with the high and low behavioural attitudes of the customers (BT, 2013). Extensive use of internet in the operations is one of the primary roles of information system or technology in Tesco. Over the years of its operations, the company has developed its operational website in such a manner, through which it not only enabled the customers to buy goods found in any normal store but also facilitated them to buy other products like car and furniture among others. Moreover, through this approach, the business has enhanced its operations in the non-food sector as well. Besides, the company has implemented the technology of Radio Frequency Identification (RFID) with regard to improve the availability of the customers. The technology has enabled the company to automatically track the existing stock level of its stores along with the items that are in-line to enter the stores. Precisely, this aspect has enabled the company in managing its inventory quite effectively. Furthermore, with this particular technology, the company has been able to reduce the price of certain products and sell the same at a competitive price owing to the fact that RFID has reduced the aspect of wastage in the operations of Tesco quite considerably (Kelly, 2009). Over the years, it is viewed that Tesco is among the companies, which is known as an effective user of IT or information systems in its operations. It will not be ambiguous to state that the operational efficiency of the retail giant enhanced and rose due to the approach of implementing the most advanced forms of technology in its operations. The aspect of technology has helped the company considerably in depicting what products to be sold to the customers and consequently, how to sell the same to them. The company extensively uses advanced technology in order to create database of customers and comply with their respective preferences along with requirements. Contextually, the company has been able to introduce club card to award the loyal customers with discounts, which is depicted to be one of the prime demands of the customers. Furthermore, with the help of advanced technologies, the company also became quite able to collect data regarding the customers with the intention of recognising their behaviour of buying, frequency of purchase and other aspects assisting the company in designing its approach accordingly towards ensuring deliverance of effective services (Davies, 2013; [2] Tesco, 2013). Analysis and Conclusion Analysis From the above discussion with regard to the implementation of technology or information systems in Tesco, it is apparent that operational efficiency of the business is largely enhanced owing to the reason of implementing advanced technologies in various operational domains. Contextually, in consideration to the results of the above illustration, this analysis will mainly focus on how information technology impacts any particular business throughout the tenure of its operations. These will be discussed in detail in the following. For several ages, business has been under the considerable influence of IT. In various domains of the business, the significant role of IT cannot be ignored. In the modern day context, most of the business is performed through computers and other communication devices. This enables business to be performed in an organised manner. This aspect can also be seen in relation to Tesco, depicting how the company uses technology in various sections of its business to ensure that it can conduct various operational functions effectively and attain desired results of the business (Tsai, 2003). Nicholas Carr, in his article depicted that IT does not really matter in business as it is one of those elements, which is easily accessible by any business and hence gaining competitive advantage through this might not be possible. However, this thought of Carr can be contradicted from the fact that IT has enabled Tesco to gain immense competitive advantage in the retail industry. The only difference is effective implementation of the technologies or the information systems through which certain companies fail and succeed to attain their respective business targets. It is often viewed that IT develops technological infrastructure and manages the aspect of information in the business processes. Furthermore, with the implementation of IT in business operations and processes, innovated thinking process can be fostered in the same. Again the relationship or the need of IT in business processes can also be depicted from the aspect that it enables any particular business to predict the changes in the industry and strategize its move accordingly. This can be depicted from the example of Tesco, which has implemented IT to predict changing nature and purchasing behaviour of the customers, further devising its operational move in accordance with the same. Furthermore, another crucial importance or presence of IT in business lies in the aspect of customer relationship management (CRM). Observably, the above discussion depicts that Tesco implements the BT cloud nine technology in order to maintain a healthy relationship with the customers through assisting them with all their queries and complying with their respective needs (Attaran, 2004). This depicts about how IT is prevalent in various operational domains of a particular business process. The role of managers and top level management of business is quite important in the process of implementing advanced technologies in the operations of any sort of business. The management of any business, which has the desire to implement any technology, should initially need to understand advantages, complexities, compatibility and cost of implementing the same. Their responsibility in the adoption of technology is not limited to this aspect rather they should also understand the organisational factors like the size, nature, need and position of the business in the industry in order to ensure effective implementation of IT. Apart from these aspects, the management of any business will also need to remain much aware about various environmental factors like competitiveness, public along with government policies and impact of technology upon the stakeholders prior to the implementation of any particular technological aspect in the business (Elbeltagi & et. al., 2013). Conclusion From the above analysis, it can be comprehended that IT is regarded as one of the major determinants of any sort of business in the modern day context, which supports an organisation to attain its predetermined business targets. Companies in this competitive business scenario ensure that their operations are executed in an efficient manner so that they could be able to meet the expectations of the customers and in turn gain their loyalty towards the same. Contextually, the role of technology has become quite prominent. This can be comprehended from the example of Tesco, which has implemented varied advanced technologies in various domains of its business processes. The efficiency of the operations of the business is largely owing to the fact that it implements advanced technologies in every business or operational sphere, which not only enhances the efficiency of the business but also ensures gaining maximum attention and loyalty of the customers towards the business. Hence, it can be concluded that statement of Carr about the importance of technology in business can indeed be contradicted by a considerable extent. References Attaran, M., 2004. 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