Tesco ensures IT function aligns with business aims

The annual conference of the Corporate IT Forum has heard how any proposal for IT spend at Tesco has to satisfy four key...

The annual conference of the Corporate IT Forum has heard how any proposal for IT spend at Tesco has to satisfy four key questions to show how it supports the retailer's core purpose of creating value for customers in order to earn their lifetime loyalty.

The questions, said John Clarke, Tesco's director of group technical architecture, are:

  • Will it make the customer shopping experience better?
  • Will it increase the capability of staff by making things simpler?
  • Does it result in a more agile infrastructure?
  • Does it use common back office systems and process?

Addressing an audience of senior IT corporate users, Clarke illustrated these principles in action through an overview of Tesco's activity in the areas of wireless and radio frequency identification devices. This is a good application to show how those in IT are best positioned to bring innovation to a business.

The combination of the mobility offered by wireless technology and the data precision enabled by RFID tags represents a step change opportunity to improve productivity and effectiveness and provide accurate information at point of use, he said.

This technological innovation is directed towards providing "real-time visibility of product availability and location in a store and in the supply chain" said Clarke. Behind this technological aim is the business aim of giving a better shopping experience to customers, simplifying processes for staff and reducing costs.

Tesco is currently running pilot projects to wireless-enable three shelf-edge activities: stock maintenance; price management; and customer product information. "Wireless means that we are with the customer in the shop and not having to go into the backroom to deal with queries," said Clarke.

He believes the climate is right for rapid advances in this area. The cost of RFID tags is coming down, from about 15p last year to 6p today, partly due to technology advances and partly cost economics. The cost of readers is also falling.

Tesco is conducting several RFID trials - in Cambridge with Gillette razor blades and in Sandhurst with DVDs, for example.

There are challenges ahead for the technology, not least a common product markup language, but the vision is clear, and IT lies at the heart of it.

www.tif.co.uk

This was last published in July 2003

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