The History Of Information Systems In Tesco Information Technology Essay

TESCO is a house hold name in UK. It is having biggest market share in retail industry of the country. The company was started in 1919 by Sir Jack Cohen. The name “TESCO” is formed from initials of company’s tea supplier T.E.Stockwell and Sir Jack Cohen. In 1932, TESCO was formally registered a private limited company and since then company is known as TESCO PLC. In the end of fourth decade, company had grown to more than 100 stores. Impressed by self-service culture of USA, Sir, Jack Cohen opened first self-service store in 1951. Then company started expansion by acquisition. By the end of sixth decade, company had overtaken five competitors with a total of about 600 stores.  But by the starting of 70’s customer become more aware of quality but TESCO was not up to their expectation. Stores were poorly maintained and items were of poor quality.  But in the late 80’s company concentrated on customer need and during late 90’s lead by Sir Terry Leahy, it becomes the largest retailer in the country and fourth largest in the world, it has lots of branch in the Malaysia too, so I want to consider the information system and tell how it can improve it well.

Identify the main IS in that company

The EPOS (electronic point of sale) information system processes the input data that is derived from human inputs and data already stored in the relational database into utilizable information. The information is used internally and for customers.

The information that is distributed by the system is:

Transaction Details

Product Description

Pricing Details

Stock Holding Details

Club card Details

Payment Details

All of the information that is produced can be made into reports for them the organization and the customer. The most common customer report is the receipt. Dependent on the level of security, members of staff can interrogate the system for specific information to assist them in their strategic roles. In addition, all supermarkets expanded the idea of connecting to their suppliers so that orders could be sent electronically when inventories arrived at their reorder levels. However, although this gave great cost efficiencies, it did mean that suppliers could still be taken off-guard when orders were received.

At the end of the 1990s Tesco developed the Tesco Information Exchange system (TIE), which enables Tesco’s suppliers to monitor sales and stock levels of their products at Tesco branches. Therefore, suppliers are more aware of when deliveries are needed as they can perform their own specialist forecasts of demand and more closely integrate their production of goods, send off and delivery to supermarkets. This process can be extended so that instead of a supermarket placing an order, suppliers know when they need to deliver to supermarkets. Suppliers monitor their own stocks at the supermarket branches and this enables even closer integration with their customers.

Through technological development Tesco has greatly improved its preparation, incoming logistics and supply chain management. For example, if a product promotion is being run by Tesco, suppliers can watch closely the consequence of the promotion on demand and react accordingly. This is an example of management processes and business processes being redesigned so that transactions can be monitored and analyzed real-time. Costs are reduced and customer service is also improved, which gives the company competitive advantage.

List the hardware and software used by these IS.

POS terminals – Cashier Operated


Customer and Operator displays

Barcode scanner


Cash drawer


Card readers

Electronic Funds Transfer POS (EFTPOS) Pin Pads

POS Terminals – Self-Service


Touch screen displays

Barcode scanner



Card readers



In branch

Head Quarters (HQ)


Internet connections

Phone lines

The products are scanned using the barcode scanner. Each products barcode is identified by the barcode scanner software. The scanner reads the barcode and transfers this into electrical pulses. The software then reads these signals and converts them into readable text. The readable text is then used to find and display the product on the customer and operator displays. This process only takes a few milliseconds to complete.

As the products are being scanned, the computer totals up the price of the products. Once all of the products have been scanned, the computer then carries out the necessary calculations, deductions, special offer deductions, etc. to the total. The computer refers to the branch server to check for the special offers which may be in effect and any products which have been lowered in price.

Once the total has been calculated, the customer has 3 different options. These are: provide Club card details, pay by cash or pay be card. If the customer has a Club card, then this is usually what is provided at this stage. The club card is linked to the transaction by swiping the magnetic stripe on the back of the Club card through the card reader. The card reader will pick up the magnetic signals and register the customer to the transaction. The computer will generate the amount of points that should be added to the club card for the transaction.

The customer now has two different methods of payment. These are: pay by cash or pay is card.

– If a cash payment is made to a cashier checkout then the customer would hand the money to the cashier. The cashier then will input the amount handed to the computer. The computer will then carry out the calculations of the amount of change due back to the customer. Once this is done the cash drawer will open so the cashier can place the money handed to them into the drawer and give the change necessary.

– If the customer is using a self-service checkout then the customer will have to feed the money into the terminal. The computer will read how much money has been given and calculate the amount of change that is due back to the customer. If change is due back then, the coins will drop into a bowl and note output notes from the notes dispenser.

– If the customer is paying by credit/debit card then there will be an EFTPOS Pin terminal placed in a convenient location for the customer. The customer will be requested to insert their card into the terminal. Once they have done that, the card details will be checked. This is done by the terminal connecting to the required bank and checking the details. When that is complete, the terminal will request the customer to input their PIN number. Once they have done that, the terminal will once again connect to the bank to check the PIN number against the card. If it is correct then the transaction will be made. If not then the PIN code will be rejected and the customer will be asked to enter it again.

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Once the transaction is complete a receipt will be printed, usually using a thermal printer. The customer then takes this with them to keep as a record.

At the end of every night, the terminals will transfer the transaction records to the branch server. This will then connect to the HQ server using a VPN to transfer all of the records. The HQ staff will use this data to determine what changes are necessary in the branches. If the branch is a 24 hour store, then the server will have a set time to which it will upload the data to the HQ server or every record will be uploaded in real time. This depends on the type of store.


Each time a delivery arrives, KC Stock Manager allows you to scan and quantify stock as it comes in, comparing it to exactly what was ordered on your supplier purchase order. KC Stock Manager allows for part orders received, damages in transit and missing stock. Each time an item of stock is scanned, a record of the arrival time and the staff member scanning is made for future reference.

KC Stock Manager Can support a multi-process warehouse, allowing movement of stock in one stage: straight to bin operation, two stages: quarantine and process operation or any number of stages. KC Stock Manager can show the warehouse worker default bin number, and any amendments that have been to its location, whist supporting serial and batch, single and multi-bin items. KC Stock Manager allows data transfer to your accounts package on-demand at any time of the day. This allows received items to be picked for manufacture or delivery on the delivery date.

KC Stock Manager allows you to review outstanding sales orders, and prioritize picking schedule. You can choose your picking criteria based on order value, percentage ready for picking, stock location, customer priority, age of order or due date, and with this KC Stock Manager reverts to your accounts package for any specific notes or flags on the order or designated customer. Orders can be split per scanner, and stock differences reconciled on-the-fly allowing multiple workers to pick separate or the same order. The scanners then relay back to the main servers so the warehouse or shipping manager can track the process of orders and allocate pickers or packers to their relative station. KC Stock Manager’s ‘Workflow Manager’ can help with this as a standard feature.

You can choose to print the picking list, which includes stock location and which carton or pallet each item should be packed into, as well as any delivery notes for that specific item.

WIN-EPOS – Windows Embedded for Point of Service 

Windows Embedded for Point of Service (WEPOS) Advantages for Point-of-Service Devices As the first Microsoft operating system designed especially for point-of-service systems used by retail and hospitality organizations, Windows Embedded for Point of Service (WEPOS) will deliver at the point of sale and beyond.

As a core component of the Microsoft Smarter Retailing Initiative, WEPOS offers the following advantages to retail and hospitality organizations:

• Easier. Windows Embedded for Point of Service is the first POS operating system platform to provide plug-n-play peripheral support. Extending standard desktop PC plug-n-play support to retail device peripherals, this will enable retailers to quickly install and integrate current and legacy retail device peripherals into a point-of-service system. WEPOS also offers a standard platform optimized for retail and hospitality applications and familiar device management technologies.

• Empowering. Windows Embedded for Point of Service also empowers retailers to create the most compelling customer interactions by providing a standard, retail-optimized platform that includes the required retail-specific technologies, and full support for standard retail applications and device peripherals.

• Lower Life-cycle Costs. Windows Embedded for Point of Service also provides low retail point-of-service life-cycle costs by decreasing OS and application development costs, deployment costs, servicing and maintenance costs, and POS hardware costs while providing the longest published product support life cycle for point-of-service systems.


Keyboard – the commonest way to enter data into a computer. Each key is simply a switch, which when pressed, results in a digital code being sent to the computer. For example, pressing the ‘A’ key produces the code 01100001 representing the lower case letter ‘a’. Holding down the shift key at the same time produces the code 01000001 representing the upper case letter ‘A’.

Mouse – the movement of the mouse over a flat surface is mirrored by a pointer on the monitor screen. Under the mouse is a ball which rolls and turns two shafts, one for each direction – left/right & up/down. Buttons on the mouse enable selections to be made from menus, movement of objects around the screen, and painting or drawing.

Joystick – works in similar way to a mouse but usually used for playing action games. The “fire” button or trigger is used to shoot at the targets provided in the game.

Microphone – for the input of voice in place of using the keyboard and mouse. Special software is used to convert voice into text or to activate menu options. This requires fast processing and a lot of memory and will become more common as the technology improves.

Digital Camera – light received through the lens is converted to digital signals by sensors, rather than stored by chemical change on a film as in a normal camera. The resulting “photograph” can then be stored on a computer and used just like any clipart files.

Video Digitizer – enables video signals from a standard video camera or cassette recorder to be read into a computer. The video can then be stored as a file, displayed on screen and edited. Still images can be captured and printed or used as clipart.

Midi – Instruments – normal musical instruments which have a midi port for input into a midi interface in the computer. The music can then be stored as a file, displayed on screen and edited ready for playback.

Scanner – like a photocopier it scans a full page with laser light but instead of printing copies, it transmits the image to the computer as digital code, which can be saved as a file. In effect, it performs the exact opposite function to a printer by converting a printed page into a computer file. There are also hand held scanners which can be wiped over the page but they have to be used very slowly and carefully for good results.

Graphics Tablet – a flat pad which you can write or draw on with a pressure sensitive stylus (like a pen). Movement across the pad is mirrored by drawing on the monitor screen. Used for art work and computer aided design.

Sensor – chemical responses to the physical environment or movement can be converted to electrical signals in the sensor that can be translated and used by the computer. Various sensors can be used to measure heat, light, sound, pressure, strain, acidity (pH), oxygen concentration, humidity, pulse, water level, water flow, speed, tilt or simply whether something like a door or a valve is open or shut.

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Remote Control – emits a beam of infra-red light which carries data signals. Commonly used for input to TVs and VCRs and now becoming used by computers as a “wireless” method of communication.

Light Pen – the pen works directly on the screen. Touch sensitive screens and electronic whiteboards that respond to the touch of a finger are now replacing these.

Bar Code Reader – almost everything you buy has a bar code either on it or on its packaging. The bar coded item is wiped over a laser scanner or a wand is wiped over the bar code to read in the data. It is the same as a scanner but due to the simple nature of the bar code the scanning is very rapid. Used at supermarket checkouts and some libraries.

Braille Keyboard – the keys are marked with raised dots as an aid for the blind.

Concept Keyboard – a flatbed of contact switches covered by a flexible membrane over which can be placed an overlay marked with whole words, pictures or symbols. The computer is then programmed to respond appropriately to these. Used in education as an early-learning aid, in restaurants so the operator does not need to know the prices, and in messy places where a normal keyboard would be at risk.

Optical Character Recognition (OCR) – uses an ordinary scanner to take a photographic image of printed or even hand-written text. Special software then looks at the image, recognizes each character and converts it into a text file. This can then be edited using a word processor. It is also used to automatically recognize post codes on letters at sorting offices.

Optical Mark Reader (OMR) – similar to a bar code reader but uses infra-red light to scan pencil marks on prepared forms such as multiple-choice examination answer sheets or lottery tickets.

Magnetic Ink Character Recognition (MICR) – uses ink containing magnetic particles. This method is used by banks to print on a cheek the amount that it is made out for, then it is scanned into a computer.


CRT Monitor – The commonest visual display unit (VDU) used by desktop computers today. It is similar to a TV but has no UHF receiver. For the scientists amongst you – it uses a cathode ray tube (CRT) to fire electrons at a coating of very tiny phosphor dots on the inside of the screen. This causes the dots to glow. A red, green and blue (RGB) dot makes up a pixel of visible light. By varying the intensity of each of these primary colors, the whole pixel will appear to the human eye as any color desired. The denser the pixels the greater are the clarity, or resolution, of the screen image.

VGA (Video Graphics Array) = 640 x 480 pixels 

SVGA (Super Video Graphics Array) = 800 x 600 pixels 

XGA (Extended Graphics Array) = 1024 x 768 pixels

LCD Monitor – smaller, lighter and using much less power than a normal CRT monitor makes them ideal for portable lap-top computers. Also used in watches and calculators. For the scientists amongst you this is all to do with the polarization of light by an electromagnetic field applied to a crystal which produces a liquid crystal display (LCD). These screens are rapidly replacing CRT both for computers and for home television.

Daisy-Wheel Printer – like a typewriter but with the preformed letters on the ends of spokes to form a wheel. The letters strike an inked ribbon onto paper. Good (typewriter quality) resolution. Very slow – ½ ppm (page per minute). Very noisy. Can only print the characters provided on the wheel and no graphics (line drawings, pictures). One color (monochrome) only.

Dot-Matrix Printer – a set of steel pins strike an inked ribbon onto paper producing any desired sequence of dots. Low resolution – 72 dpi (dots per inch) – can just see the dots. Quite fast – 1 pm. Slightly noisy. Can print any shape of character (font) stored in the computer memory and any graphics, all on the same page.

Ink-Jet Printer – fires a jet of liquid ink through tiny holes. High resolution – 300 to 600 dpi for almost professional quality, sharp printing. Fast – 3 ppm. Very quiet. Cost around £100. Full black and color print on same page. Thousands of colors are created by mixing tiny dots of cyan, magenta and yellow (CMY) ink on the paper. Replacement ink cartridges for each color cost around £10-25. Better printers have separate black, cyan, magenta and yellow cartridges for more economical replacement when empty.

Laser Printer – works like a photocopier, powdered ink is fused onto paper by heat and pressure. Very high resolution – 600 to 1200 dpi for full professional quality. Very fast: 6 -16 ppm for multiple copies. Almost silent. Cost around £100. Replacement black ‘toner’ cartridges cost around £50 but last a long time and much more economical than ink-jet printing. Colour laser printers are more expensive at around £250 with £50 for each of 4 replacement cartridges but still cheaper to run than color inkjet printers.

Braille Printer – by converting text into the Braille code, this printer produces patterns of raised dots on paper for use by the blind.

Graphics Plotter – uses high precision motors controlled by the computer to draw on paper with color ink pens. Used for drawings where a high degree of accuracy is required such as building plans, printed circuit boards and machine parts.

Speaker – for music or speech from programs, CD-ROMs and musical instruments.

Light-Emitting Diode (LED) – small low power devices which emit light. Used to indicate various events such as power on or hard disk in operation and to monitor other control applications.

Relay switches & motors – a computer can be programmed very easily to turn switches on and off at the required times. For example to control traffic lights or electric motors in a robot arm. Used in the automobile industry to spray body shells or to assemble and weld parts together; or to assemble delicate electronic components on a printed-circuit board for computers, radios and almost anything else you can think of.

What type of IS is available in the company

In 2002, Tesco decided to create a single Management Information System (MIS) solution to support both local and group reporting requirements.

“As Tesco extends its international operations it is becoming increasingly important to achieve commonality of key performance indicators across all countries,” says Mark Goddard, IT Strategic Development Manager of Tesco “to ensure consistency of quality and customer experience, Tesco needs sophisticated business insight, irrespective of the size or maturity of each international operation.”

Approach a core component of the company’s international expansion is its approach to IT development, building solutions once and deploying the standard solution to all of its global operations. Following this model, Tesco opted for a centralized MIS that could deliver highly sophisticated reporting to even the smallest international operation.

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Goddard explains, “Tesco has already created a robust reporting architecture for the UK and Ireland using a Teradata data warehouse and Business Objects reporting tools. After careful consideration, it was apparent that a centralized, web-based MIS solution that leveraged this proven technology would deliver the most cost-effective yet sophisticated international reporting solution.”

A key component in the decision-making process was the functionality of Business Objectsâ„¢ Enterprise

“The combination of a totally web-based business intelligence product and Business Objects close relationship with Teradata delivers the speed, functionality and flexibility required to deliver both standard and ad hoc reporting in a timely fashion to Tesco users across the world, “says Goddard.

Tesco opted to first deploy Group MIS in South Korea where it has 30 hypermarkets. Information from The Retek RMS operational system is sent via a Wide Area Network to a Teradata master data ware house In the UK. This information is then aggregated and loaded into the Teradata reporting data warehouse.

From 7am, users in South Korea have web-based access to Business Objects reports, providing complete Insight into the previous day’s performance.

“The creation of a centralized MIS solution based upon Business Objects and Teradata is enabling Tesco to create a single set of key business performance indicators across the UK and all international operations. This consistency is crucial for Tesco and will enable meaningful international performance comparisons that will inform ongoing global expansion.”

Identify the strengths and weaknesses of Tesco information systems:

At first company was focused on food and drinks but with the development company now deals with various products like electronic goods, mobile or telecommunication services, financial services, insurance, internet services, clothes and introducing more and more products. As I searched (1) the Company is now entering new markets and expending for instance they have plans to enter housing market, with a website named TESCO Property Market.

In addition, the company is using a lot of software and hardware to reach the high sale and best communication to their customers, thus they try to have and use of technology as well as other their competitions.



-Increasing information system

-Use of new technology

-Tesco online shops

– It has not good training for customer.

– need to get a feedback

Tesco online is the world’s biggest online supermarket and this year the group had sales of over £577 million, an increase of 29% on last year. Households nationwide having used the company’s online services, the company has a strong platform to further develop this revenue stream (2).

Use of new technology

 As we can see in most branch of Tesco, There are various parts of the new technology that is useful for customers, such as: cods, laser reader, member cards, and….

There is not good training.

Some of the consumer can’t use new technology because they aren’t inform, so company should have special program to improve this part of company. If they get it, so will see the reduce cost and increase benefit.

What improvement can be done to the IS?

Tesco can use Information Technology to improve the shopping experience for customers. In store it’s more about delivering effective systems so customers enjoy a smooth shopping trip so they can develop complex systems that enable us to offer insurance, banking and lottery tickets at the till.

Also, the successful graduates can develop inventive technologies that enhance, develop and strengthen every aspect of the business. They can work on projects that positively impact customer’s shopping experience and develop innovative systems that lead the way in retail technology. They can also setting Information Technology standards and application which deliver world class systems for the Tesco Group. They should work with colleagues to undertake research and development, and persons which drive the business forward.

In addition, The Strategic Development team has to design and deliver new systems throughout the business. From commercial systems through to retail applications in the stores, they can get real insight into the positive impact Information Technology delivers for customers and the business. According to the articles the Service Delivery supports internal customers, maintaining and developing systems that impact the way the business works. Regular contact with users in different business areas means their ability to communicate with people from all backgrounds will be equally important as other skills gained on the scheme and plan.

Finally, The Group Information Technology team should design, develop and deploy the Operating Model. The Operating model delivers best practice capability to Tesco businesses. They will become part of the team delivering the Operating Model ensuring operating cost efficiencies, country sales and margin improvements and faster in Malaysia.

Flowchart / DFD for the key systems:

Having guided the staff or client operator of the electronic point of sale (EPOS) unit via a logical pathway of instructions on the visual display unit (VDU), the EPOS system will have collected the necessary data from the operator inputs. For example, scanned BAR codes identify the product, quantities of more than one item are keyboard input, monetary values are either input in cash counted by machine or staff and card payments are processed by the Electronic Funds Transfer Point of Sale (EFTPOS) sub-system. The EPOS system processes the input data by calculating new attributes (values) that will update the fields in the tables of the relational data base later to be organized into usable information in the form of customer receipts and management reports as and when requested.


1. It Facilitates planning: MIS improves the quality of plants by providing relevant information for sound decision – making. Due to increase in the size and complexity of organizations, managers have lost personal contact with the scene of operations.

2. In Minimizes information overload: MIS change the larger amount of data in to summarized form and there by avoids the confusion which may arise when managers are flooded with detailed facts.

3. MIS Encourages Decentralization: Decentralization of authority is possibly when there is a system for monitoring operations at lower levels. MIS is successfully used for measuring performance and making necessary change in the organizational plans and procedures.

4. It brings Coordination: MIS facilities integration of specialized activities by keeping each department aware of the problem and requirements of other departments. It connects all decision centers in the organization.

5. It makes control easier : MIS serves as a link between managerial planning and control. It improves the ability of management to evaluate and improve performance. The used computers has increased the data processing and storage capabilities and reduced the cost.

6. MIS assembles, process, stores, Retrieves, evaluates and disseminates the information



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