Information stimulates the emergence of new specialized software


Information
systems have become today the most important tool for an effective trading
business. With effective use, such systems allow companies to obtain
significant competitive advantages on the market. The dynamic growth of retail business leads to enhanced competition
between opponents. This, in turn, forces enterprises to increase their
efficiency, which to a large extent depends on the capabilities of the software
products used to quickly process large amounts of information. The growth of requirements of trade enterprises
stimulates the emergence of new specialized software products with enhanced
capabilities (Kelly, and Casey, 2010). On the other hand, software developers
regularly offer trading enterprises more and more advanced products, ensuring
the efficiency of managing many business processes in retail. Today, retailers
use various specialized information solutions, such as Paterson, SAP Retail,
Perekrestok, Navision, and others.

Tesco
is one of the largest supermarket chains in the world. Its management managed
to apply a very comprehensive idea: according to their strategy, they laid a
scalable system in an information system.
Tesco was capable to identify the requirements of its consumers, compile their
portraits and systematically gather all data regarding their preferences and purchases
Interaction
of Office and Trade Programs

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One of the most
important problems to be solved when creating an integrated information system
in retail trade is the organization of interaction and data exchange between
the analytical software of the head office and the programs responsible for the
work of outlets, including those supporting the operation of the cash register
equipment. Between these two parts of the information system, there is a
movement of significant information flows. The main flow of information from
stores is the data on sales of commodity names from the POS terminals of stores
(Gallagher, 2012). From the central office,
stores receive information on the range, prices, and special conditions for the
sale of goods.

Focus in the
office part of the information system of algorithms for centralized management
of the assortment of goods, pricing for a single assortment for the whole
network, information on promotional and advertising promotions, as well as
other business processes is typical for most large foreign and local network
retail companies (Morley, and Parker, 2004). The other part of the information
system that gives the work of particular stores is made mostly to automate the procedures
of ordering and accepting products, carrying out inventories and other
decentralized corporate systems. The practice
has explained that an effectively managed
exchange of knowledge between programs in Tesco stores and the office part of
the information system supports to considerably decrease transaction costs at
the position of individual stores and the company as a whole.

 

Strategy
for Adapting Business Processes and Information Systems

 

The fundamental
issue that trade Tesco face in the process of improving or implementing a new
information system is often the choice of a decision on how much more effective to adapt the information system to
existing established business processes, and in which to optimize the business
processes themselves in accordance with the functionality of the implemented
information system (Anderson, 2012). Unlike other retail chains, in which
information systems are initially used and improved along with corporate
business processes, this issue has become extremely urgent for all retailers.

The
restructuring or optimization of business processes directly relates to a
well-established mechanism of interaction between employees and individual
structural divisions of the company, which at the initial stage of implementing
a new information system can affect the effectiveness of their work. In
addition, the costs of improving the information system integrated with the
company’s business processes in the future directly depend on the decisions
taken at the stage of its implementation (Cole, and Kelly, 2011).

Independent
further modernization of the information system requires a large expenditure
for the maintenance of a large IT department in the Tesco, which only retail
market leaders can afford. For medium and small retail companies, the use of
information products updated by the manufacturer is more typical. Thus, if for
unique retail companies’ unique information systems are one of the main
competitive advantages, then for business and small retail networks, business
processes and work technologies, based on standardized information solutions,
can be a competitive advantage (Kelly, 2009).

Integrated MIS
has also acquired this purpose as the use of MIS has been effective in getting performance
in managing the corporate procedures of Tesco. As the Tesco business market is
huge, it has different systems which it must perform steadily. Club cards are a
Tesco service product which is applied to
the consumers during shopping. The MIS has supported the club card processing simple
due to which a large number of consumers are using the cards successfully
(Paul, 2001). One of essential systems in
Tesco’s is controlling the supply chain. Tesco has established an integrated
MIS for retail suppliers which supported the supplier to directly present the
stock to the stores without delivering them to
the warehouse. This enhanced stock control and effective returns handling.

 

Main Features
of Information Systems

 

Modern
information systems make it possible, as soon as possible, to identify the most
significant trends in the development of the company as a whole and assess the
efficiency of individual structural units. The collection, processing, and analysis of information in terms as close
as possible to the real-time mode allow quickly correcting the company’s work,
as well as taking into account changes in external factors before competitors
do it (Paul, 2001).

The most
important capabilities of modern information systems include: planning of the
main indicators of retail stores, such as turnover, profit, quantity and
average purchase size; analysis of the effectiveness of the use of retail
space, labor productivity staff, etc; an assessment of the compliance of
planned targets with real ones (Kelly, 2009) 
. This parameter places high demands on the efficiency of data
collection and processing.

A special place
in the automation of the company’s reporting system is the financial and
accounting reporting. Periodic changes in the tax legislation and the reporting
system submitted to various state bodies require from the information system of
the Tesco certain flexibility and the ability to adapt to such changes (Cole,
and Kelly, 2011). Internal control of all financial flows of a large or
medium-sized company without the introduction of modern automated information
processing technologies is significantly hampered.

 (Castells, 2010).

 

Another
important issue of automation is the correct interaction with information
systems of third-party organizations in the implementation of mutual
settlements. Automation analysis of the structure of purchases and the dynamics
of the average check allows Tesco to increase the effectiveness of existing
loyalty programs in retail networks (Anderson, 2012).

Non-trivial
results make it possible to obtain the use of Data mining tools based on the
search for hidden regularities in large data sets. An information system is a tool that allows timely acceptance and
evaluation of the effectiveness of both strategic management decisions and
individual projects within the framework of retail business development. The
system can be considered as a guarantee of effective expenditure of attracted
resources (Morley, and Parker, 2004).

 

Security
Systems Help to Trade

 

Integration of
automated elements of the security system with other business processes of Tesco
can lead to mutual enhancement of their effectiveness. Thus, the time-lapse
analysis of video surveillance for buyers in trading rooms can be used as a
tool for determining the behavior of buyers when buying certain categories of
goods, and analyzing video recordings of the work of store employees can
significantly improve the efficiency of their work (Morley, and Parker, 2004).

Analysis of
atypical purchases allows the company to
identify weaknesses in the security system. Signs of an atypical purchase can
be, for example, the purchase of an extremely large number of units of goods,
making a large number of purchases in an ultra-short time at one cash desk or
making a large number of purchases using one discount card for one day. This
analysis will require data from the stores’ terminals (Gallagher, 2012).

 

Cost
and Effectiveness of the Information System

 

Undoubtedly, the
more perfect the information system, the higher the cost of its implementation
and support. In most cases, before implementing an integrated information
system or individual modules, it is advisable to compare their cost with the
value of those competitive advantages that the retail company receives as a
result. At the same time, as a result of implementation, both the reduction of
transaction costs and the receipt of additional revenues can be considered as a
result of the increase in turnover and/or
the investment attractiveness of the company (Castells, 2010).

 

Wholesale
Distribution

 

This is the key
link in the supply chain. Its task is to link the producer and consumer of
products that can be located far from each other, including in different
countries. Only the world’s largest producers are able to build their marketing
logistics so that they do not need intermediaries (Kelly, and Casey, 2010). The
work of an intermediary – a wholesaler or distributor – is not a simple
“buy-sell”, but a complex process that involves:

Collection and
analysis of customer needs;

Attracting new
customers and retaining regular customers;

Calculation and
maintenance of the optimal level of stocks;

Order management;

Supply chain
management;

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