Tesco case

Do Tesco enjoy an Information Technology (IT) - generated competitive advantage? Where does it come from?

Tesco is one of the best supermarkets in the world. It goes without saying that this success owes to the success of IT strategy and implementation of Tesco. The fascinating their main IT strategy is 1) thoroughly customer analysis by POS and 2) highly used online-shopping system.

1) thoroughly customer analysis by POS

Tesco focused on customer behavior and need – who bought this goods?, what they bought?, when they bought it?, why they bought it ?, what they need ? , why they complain?, why they felt happy? etc… By developing solid and excellent Database and POS system, they were able to get these much information and analyze customer preference. Thanks to POS, they could reduce operation cost and get much information about customers and then develop marketing strategy. Though many companies use POS, now, but, I think, Tesco was the leading company for introducing this system and utilized well.

Now, new tagging technology – RFID is appearing. RFID can read any information of goods from tag and send this information to company’s Database system and integrate ERP or mission critical system in the company. This technology and integration will pretty contribute to company’s business efficiency. I think this RFID technology will change our purchasing behavior and companies, especially retailer and manufacturing, business model. Since the price of each tag is still high and running cost is high, many companies hesitate to introduce RFID system, though admit this excellence. This new technology is the key factor for companies business success. Tesco may lead in this new technology field as it succeeded in POS system.

2) highly used online-shopping system

At present, online-shopping is natural and there is no brand-new in this business model, but Tesco started this business in 1996, this was the herald in this business among retailers. They designed to allow customers compare Tesco’s price against those of competitors. Also, they received the first RNIB Accessible web site award. From this, we can see how effective and wonderful this business.

From this case, I realized that that making use of IT system properly, company can develop their business infinitively. Tesco has proved that.

Case del Libro

1. What would be your decission? Would you stick to the previously developed UNIX platform, or switch to the new Microsoft one?

I will switch to the new Microsoft one.
Since dot com burst, the company has obliged to reduce cost.
Also, the development of previous platform project did not work well – bad system architecture and operations - in spite of too much investment. If this situation goes on, this project would absolutely go into “Death March”.
Generally, system availability and reliability of UNIX is higher than those of Windows system, but, if it is not well designed or implemented (In this project, NOT!!), it would “sit on a gold mine”.

Considering these situation, the company should change their strategy from high platform to simple one.
At first, the company develops simple platform, and then, if this system is fully utilized and required system expansion, we can expand more.

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To engineer & system administrators, high platform -high speech hardware & software- is really happy, if project worked well. The system reliability, availability, functionality, and performance are higher than new one, so they do not have to devote too much time to performance tuning and system recovery in case it downs.

2. Which are the most relevant criteria for you to make the decision? Just name each criterion, and explain it very briefly.

There are 3 criteria for me to judge IT investment; Quality, Cost, and Functionality.

Quality – to win a customer’s trust, high quality products & services are required. UNIX system reliability is higher than Windows, but, in this case, because of the failure of system design, this edge is lost. Instead, even the cheap & simple platform, if it is well designed, the system quality might be better.

Cost－cost effective estimation is really required in case system development. Even if you use sophisticated system, if it is deficit, it does not make sense. Casa del Libro has to reduce cost as much as possible. The current platform costs a lot and system maintenance also will cost a lot. After careful cost simulation, if Case del Libro cannot receive enough profit, they should change to new platform.

Functionality － Full and easy functionality is attractive. If system does not provide enough function or usability, it is not attractive at all. I think functionality is dependent on application/software, so in this case, it does not matter whether Case del Libro chooses UNIX platform or Windows Platform.

In conclusion, considering above 3 criteria, changing new platform is more attractive and Case del Libro can minimize their business risk.

Should company introduce ERP?

After all, the merit of ERP is low cost & short term development.

Every company wants to avoid futile IT investment and this merit seems to be very attractive!!

All in all, company should introduce ERP?

Every company will become happy by introducing ERP?

In my opinion, ERP does not necessarily make company happy and I do not recommend ERP.

First of all, if you want to introduce ERP, you have to change your business operation according to ERP. ERP provides standardized function and it does not apply to all your business. If you do not want to change your operation and introduce ERP in your business, you have to customize ERP according to your business. In such case, I think, the project of introduction of ERP would be expensive and long term – you cannot be given the benefit of ERP. Furthermore, every time the version up of ERP, you have to customize your system. It costs again and it’s nonsense!!

From my work experience, as an IT engineer and marketer, I have never heard the success story of ERP project in Japan. Most Japanese companies hesitate to change their business to introduce ERP, so they try to introduce ERP by customizing according to their business. Then, quite a few man-hour take and a lot of system bugs are found, which finally leads this project to “death march”. I saw these kinds of failure many times.

I know many foreign companies could have made success in introducing ERP, but most Japanese are delicate and cling to their own way. The business operation in Japanese company is distinctive style and it is hard to standardize.

In this environment, the introduction of standardized software package – ERP is difficult.

Basically, when company wants to introduce new IT system, they should do so by developing system from scratch; analyze business process, system requirement, design business process & IT architecture, implement software by programming and system test, and introduce system. During this process, if there are any points where ERP or other software package can be utilize with no customization, then, company should introduce them. But, it would be better not to introduce them across the board.

DELL HELL

In 2005, a blog titled “dell hell” made a major impact to DELL.
Actually, in those days, I tried to buy new DELL PC, but, because of this word – “dell hell”, I gave up buying DELL’s, instead, I bought Sony PC -VAIO.
What dell should have done to deal with this problem or this kind of power blogs?

If I had been the CEO of dell, I would have carried out through 1) customer service and 2) marketing activity from customer’s claim

1) customer service

Swift and through customer follow up are basics of business. No matter how wonderful service/products we provide, without taking care to customers or following up them, those companies cannot survive. Also, no matter how excellent business plan/strategy we make, if it ignore customer, it does not make good business sense. In any business, we should carry out hands-on approach ( = watch & understand customer ), instead of desk theory.
Conversely, if we can deal with customer claims well and carry on through customer follow, we can get high customer satisfaction and regular customer. I was drilled this notion by my boss and keenly felt the importance of customer follow from my experience.
My company, Ricoh – OA Equipment Company, highly focused on customer satisfaction. Actually, the products of Ricoh, such as copiers and printers, are not so sophisticated, comparing to CANON or XEROX copiers, but, thanks to Ricoh’s customer oriented strategy, Ricoh competes well with them.

2) marketing activity from customer’s claim

Japan is thoroughly focuses on service country and if there are any problems on service/products, no matter how tiny ones, customers claim to them. I think, thanks to this high service/product quality and business creation from customer’s claim, Japan accomplished high economic growth. A good example is Panasonic. Konosuke Matsushita, the founder of Panasonic, I respect him as the best entrepreneur, extremely focused on customer needs and when there were any claims from customer, he thanked for them and promptly reflected these claims and requests to their products. Then, Panasonic was able to get high customer satisfaction and expand their business globally. As we can see from this case, managing customer requests/claims leads to big business success. I believe that customer oriented company is the best strategic company.
In the first place, customer does not claim to the company in which they are not interested, which indicates that customers hope to improve its products/service.
In that way, the claim from the blog of Jeff Jarvis is good business chance and if I had been the CEO of dell, I would have reflected his advice to future business in DELL.

Owing to the development of blog, we are very lucky because we can get customer’s real request or claims efficiently. We should get well along with power blogs. They give us good business hints & chances and are treasury business.

facebook facebook!!!!

1 year ago, I registered my private information and began to use facebook. Before using facebook, I used mixi – Japanese most popular SNS. My first impression toward facebook was really nice, especially developing human network. I was able to develop network with IE student before coming to Madrid. Since then, I stopped using mixi and started using facebook. Facebook is really nice tool to develop human network and communicate with friends but I think there are several issues/problems. I would like to discuss about it.

First of all, as it pointed out often, to use facebook, users have to open their private information. This becomes the bottleneck for users. In the first place, facebook is developed based on the concept that users utilize this site by their own name and share information with their friends under realistic human relationships reliance. Using real name on web site may sometimes cause privacy abuse. The service concept turns out badly. Actually, some of my friends, especially female friends, hesitate to use facebook because they have to open their real name. If this issue is solved, facebook can get more users who are afraid of privacy intrusion.

Second, the function of facebook is really rich but I think because of too many functions the performance (speed) is bad. Sometimes it freezes on my computer. Instead, twitter is so simple and if you want to send message to your friends, twitter is better. Like mobile phone, facebook has many functions which are not used so often. Too many functions causes low performance, which are not practical. To prevent this problem, I think it would be better for users to choose and customize functions what they really need.

Anyway, although there are some issues on facebook, it is sophisticated communication tool. Regardless of location, we can connect with friends. I hope this service more prevail in Japan. Since current Japanese young people are internal focus and they only interact with Japanese friends, they do not have many chances to interact with foreigners. Now, Japanese economy and market has already saturated and Japan has struggling with depression. To activate Japanese economy, business globalization is necessary and young Japanese should interact with foreigners and cultivate global mind set. In the old days, to interact with forefingers, we had to study abroad or live in foreign countries by paying much money. By using facebook, we can do that for free at any moment!! Facebook may become the savior for Japanese globalization.