Tesco is one of the top three international retailers in the world, with around 2,000 stores and 326,000 people in 13 countries across Europe and Asia. A core component of Tesco’s international strategy is consistent processes and policies, replicating UK-developed retailing excellence across the world while incorporating local cultural differences and tastes.
Underpinning consistent global business practices is a set of standard performance measures and operations. In 2002, Tesco decided to create a single Management Information System (MIS) solution to support both local and group reporting requirements.
Mark Goddard, IT strategic development manager at Tesco, explains: “As Tesco extends its international operations it is becoming increasingly important to achieve commonality of key performance indicators across all countries. To ensure consistency of quality and customer experience, Tesco needs sophisticated business insight, irrespective of the size or maturity of each international operation.”
As a result, Tesco required sophisticated reporting to support its international expansion and to ensure consistent practices and performance indicators irrespective of business size or maturity.
BusinessObjects Enterprise 6 and Teradata data warehouses provide the retailer with a centralised management information system that delivers sophisticated business insight its international operations. Improved local reporting, combined with the ability to undertake meaningful global performance comparisons, will support Tesco’s international expansion strategy.
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 centralised MIS that could deliver highly sophisticated reporting to even the smallest international operation.
As Goddard says: “Tesco has already created a robust reporting architecture for the UK and Ireland using Teradata data warehouse and Business Objects reporting tools. After careful consideration, it was apparent that a centralised, Web-based MIS solution that leveraged this proven technology would deliver the most cost-effective yet sophisticated international reporting solution.”
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 (WAN) to a Teradata master data warehouse 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.
Group MIS has also been rolled out to Tesco in Turkey and during 2005 it will be introduced to the company’s operations in Poland, creating a total user base approaching 2,000.
Simultaneously, Tesco plans to replicate the success of the commercial Group MIS with a Group Retail MIS that addresses the company’s key areas: operations, finance, people and customers. “Group Retail MIS will enable Tesco to measure store-based performance consistently across the globe,” says Goddard. “This will include measurement of wastage and stockholding, sales, staff training and review, and customer satisfaction.”
Looking ahead, the company plans to use common commercial and retail KPIs to achieve meaningful performance comparisons across the entire international operation.
Goddard concludes: “The Group MIS solution based on Business Objects and Teradata enables Tesco to take the sophistication of the UK retail market and replicate it internationally. We now have the business intelligence infrastructure to provide rapid insight into our performance across the world and, in the future, will undertake meaningful country-by-country comparison that will inform Tesco’s ongoing international strategy.”
The benefits of Group MIS include:
Improved Local Reporting
_ Tesco South Korea has attained immediate benefits from the deployment of this sophisticated MIS solution, far beyond any system that could have been deployed locally.
_ Users now have daily, weekly and monthly tracking of key areas that include sales, margins, stock and wastage. Information is available at detailed item level and users can rapidly attain like-for-like comparisons.
_ The ability to track weekly and monthly stock availability, combined with increased insight into supplier performance on a daily and weekly basis, is enabling Tesco to increase the frequency of its supplier negotiations.
_ The company can now able to improve the sophistication and relevance of marketing campaigns with improved promotions reporting and performance tracking.
_ Planned enhancements include detailed product category performance reporting and analysis by store format.
_ Leveraging the web-based