Perera 21661820 Final Report

8/2/2019 Perera 21661820 Final Report

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E-retailing by Tescoand Delivery

Francis Perera

10/17/2010

21661820


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Executive Summary

The report objective is to state the objectives of Tesco in implementing an e-market place

for its customers. Tesco looks forward to penetrate new customer segments and to increase

the customer satisfaction and value. The team is consisted of potential employees from the

marketing, HR, finance, sales and IT departments. The project team has outsourced a design

team to design the web site. The budget for the project should not increase RM260000 and

should be completed within a 4month period starting from 1st

September 2010. A feasibility

study has been done and cost estimates and a time schedule for the project activities has

been organised in a network. The elements for the above activities are based on the Work

Breakdown Structure (WBS).

The resources used in completing the report involve web sites and articles and academic

journals.

Clear succinct recommendations have been made in order to improve the current project

and future projects.


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Table of ContentsExecutive Summary .................................................................................................................................. i

Introduction ............................................................................................................................................ 4

Background and opportunity definition ............................................................................................. 4

Project Nature and Scope ................................................................................................................... 4

Rationale for the project ..................................................................................................................... 5

Feasibility Study ...................................................................................................................................... 5

Feasibility study initiation ................................................................................................................... 5

Feasibility study team ......................................................................................................................... 5

Planning the feasibility study .............................................................................................................. 6

Stakeholder analysis ........................................................................................................................... 7

Evaluation of constraints .................................................................................................................... 8

Selection of project using a project selection model .......................................................................... 9

Project scope statement and Work Breakdown Structure (WBS) ........................................................ 12

Work Breakdown Structure (WBS) ................................................................................................... 13

Cost estimates for project resources .................................................................................................... 14

Apportion method in allocating project costs using the WBS .......................................................... 14

Project budget for the e-tailing project in Tesco .............................................................................. 15

Time Schedule for project activities...................................................................................................... 16

Costed strategy to shorten the project duration by 20% ..................................................................... 19

Quality management and quality control systems ............................................................................... 22

Quality management system ............................................................................................................ 22

Quality control system ...................................................................................................................... 23

Measure to ensure superior team performance .................................................................................. 25

Monitoring and Evaluation System ....................................................................................................... 27

Monitoring the project ..................................................................................................................... 27

Evaluating project performance ....................................................................................................... 27

Project closure ...................................................................................................................................... 28

Potential obstacles to project success and ways of overcoming these obstacles ................................ 29

Recommendations ................................................................................................................................ 30

References ............................................................................................................................................ 31


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Introduction

Background and opportunity definition

Tesco Malaysia is a prominent actor in the retail industry. It is one of the leading retailers in

the world and over the years aimed at building a sustainable business model. Through

diversification into new geographies, new product areas and new services, the company is

developing a business for the future as this model will be sustainable for years to come.

Tesco enjoys several unique competitive advantages which will help the company quickly

penetrate the product category.

Grocers have benefited from superior destination status and robust footfall in the recession

due to the needs-based nature of their core food offers and continued aggressive space

expansion. Also, the company offers lower pricing as it enjoys superior bargaining power. As

part of drive to lower prices for customers, Tesco tries cut out the middlemen and source

products from manufacturers or developers, which is possible given the size of the

company. Although Tesco has competitors who have acquired a greater retail market share

in Malaysia and have used a best opportunity that is offered through the country which isthe technology sector and its application in the market. Tesco needs to obtain this

opportunity and use it wisely to have a competitive edge on the retail industry in Malaysia

(Anonymous, 2010)

Project Nature and Scope

Given the steady increase in core food offers and the aggressive space expansion, it is high

time for Tesco to capture the online market. This could be done by having a E-tailing

business model. This could be accomplished by designing a comprehensive website and an

efficient delivery service. The website is to provide an interactive environment for the

customer in buying groceries and other products offered by Tesco. It also focuses on the

delivery system where the purchased products would be delivered to the customer door

step. (in a specific geographical area. Deliveries outside this area would be charged a

standard amount). Research and development department of Tesco needs to carry out a

market analysis research on customers who prefer online purchasing and delivery. When

the results are analysed, the top management can form the project group by adding


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prominent employees from different departments that is connected with the project scope.

Such as from IT, Marketing, HRM, R&D and Finance.

Rationale for the project

The rationale for the project is to target a greater customer base and provide the flexibility

to the customers to shop online. This would tend to attract more customers and would

provide greater benefits for the customers who would enable Tesco to improve its customer

value and retention and a greater competitive advantage.

Feasibility Study

Feasibility study initiation

The research director of Tesco is responsible for the feasibility study that will ensure the

whether the project is viable. The project to be undertaken is implementing an E-tailing

environment and a delivery system for the customers. The persons involved in the feasibility

study should be involved in the project team and needs to report back with the findings

within two to three weeks after the feasibility team is appointed. The budget required for

the feasibility study is RM 1000 which would be for the industry experts and other

miscellaneous activities.

Feasibility study team

Feasibility study team comprises of the sales manager who operate as the leader. Other

team members consist of a marketing manager, IT developer, HR manager and finance and

accounting manager.


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Planning the feasibility study

Concept :- the actions of the feasibility study is to analyse the situation around the

expansion of the project, determine objectives, identify problems and opportunities, define

successful outcomes and assess the range of costs and benefits associated with the project,

and if not viable, recommend alternative solutions.

Design:- in order to carry out the feasibility study, the feasibility study team must undertake

their own research, refer to other secondary sources of information such as government

departments regarding the legal requirements needed to set up the e-tailing function.

Competitors activities, layout and service will also need to be checked. Most importantly,

the team must consult and obtain assistance from experts such as e-business developers

and web designers.

Implementation:- the feasibility study is carried out by the team according to plans made in

the design stage, and is executed over a period of two to three weeks. This will involve the

most amount of effort during the entire feasibility study.

Commission:- every two days, the feasibility team would combine their results and findings.

These will be compared to the plan stating the requirements of the feasibility study, and

they will check if their findings are relevant to and have addressed the required information.

If there are any inconsistency between what is required and what has been done, the team

will record it and rectify the problems in the coming days.


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Stakeholder analysis

This section analyses the needs and expectations of the stakeholders involved during the

project life cycle and whose interests are affected by the final outcomes of the project.

The organisation needs can be classified as having a greater customer base and providing

them a valued service which would help to retain the customers in the competitive retail


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market. Another objective is that the above approach would lead to an increased profit and

sales. There should be a trouble less way of maintaining the website and the database with

no questions about the online payment security by the customers. The budget for the

project should not increase RM260000. The deadline to host the website should be within a

4 month period from the date of the approval of the project which is1st September , 2010.

Therefore the project should completed by the end of the month of January.

The viability check the target market of this e-tailing activity is the younger generation and

the working class consumers. Most of the younger generation consumers tend to use

technology as a mode of shopping and busy working class employees are more viable to buy

products online and delivered them to their door step due to their busy schedules. There is

also a boom in the resources required to manage online businesses such as frequently

upgrading software and hardware and the technical savvy human capital in the field. There

is a high competition by other hypermarkets who retail online, although having the right

know-how and interactivity with the customers would provide Tesco with the competitive

edge.

Evaluation of constraints


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Selection of project using a project selection model

The selection criteria used in selecting a project is the Multi criteria selection model which

are considered as nonfinancial criteria. These method involves the checklist model which

involves using a list of questions to determine the acceptance or the rejection of projects.

The second method is the multi-weighted scoring model which uses several weighted

selection criteria to evaluate project proposals.

Checklist ModelThis approach uses a list of questions to review potential projects and determine the

acceptance or rejection.


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Although this method has many shortcomings where it fails to answer the importance or

value of a certain project to the organisation and does not allow the comparison with other

projects. Therefore to overcome these shortcomings it is essential to use the multi-weighted

scoring model.


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Multi-weighted scoring model

This project screening method has used five weighted selection criteria to evaluate the

project proposals. As per the above ratings it is concluded that project A is considered a

better option which is having an online retailing and delivery service by the organisation.


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Project scope statement and Work Breakdown Structure (WBS)

The project objective is to have an online marketplace to provide greater customer service

and to obtain a greater market share for the organisation. The time frame for this project

would be 3 months with a cost not exceeding RM280000. The investment provided by the

organisation would be covering 60% of the costs while the remaining amount would be

covered by a bank loan. It is important for the finished project to meet the legal

requirements required by the government to do retailing online. It is essential for the

organisation to have a team to update the database and manage customer complaints

online.


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Work Breakdown Structure (WBS)

Online Retailing andDelivery

Approval

Sending project forapproval

Finance

Organisation Capital

Bank Loan

Learn to managesecure e-payments

Design

Web Developers

Design the web page

Arrange InteractiveFacilities

IT Consultants

Make the database

Arrange onlinepayments

Sales

Sales Representives

learn to Interact withcustomers online

Making descriptionsand categories of

products

Manage StockMovement

Manage the delivery ofproducts

Marketing

Arrange Promotions Advertising

For outsiders

Promote the webservices

Equipment

For Delivery

Delivery Personal

Delivery vans

For Website

Network of computersand Server

Designing Software


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Cost estimates for project resources

The project manager is required to implement the project budget with the accounting

personal in the project team. They are using the top-down estimating methods to evaluate

the project proposal. The apportion method is used where the project team has recruited

expert knowledge on the going online business which has given the estimation of costs a

reasonable accuracy.

Apportion method in allocating project costs using the WBS


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Project budget for the e-tailing project in Tesco

Amount Total

Designing 61000

Web development software (HTML editor) 10000

Website maintenance software 10000

Subscriptions to net business publications 7000Payment to IT consultants 8000

Payment to Web designers and developers 10000

E-security payments (paypal) 10000

web site hosting 3000

Online database 3000

Sales 4600

Advertising for new recruitment 500

HRM fees for recruitment processes 600

Training for sales reps 2000

Stock movement systems (JIT systems) 1500

Marketing 13000

Designing online promotions 2000

printing banners about online retailing 3000

designing and printing handouts on how-to-use 2000

promotion through over counter 1000

advertising on complementary websites 5000

Equipment 97000

Additional PC's 6000

Server 2800

Backup systems 2500

GPS systems 4000

Delivery vans 80000

Auto responders 1700

Miscellaneous 26500

Payment to the project team 20000Project team expenses 2000

Use of organisation resources 1500

Cost of obtaining a bank loan 2000

Legal check 1000

Total cost 202100

Contingency cost (20%) 40420

Grand total 242520

Source of funds

Organisational investment (60%) 145512

Bank Loan (40%) 97008

Grand Total 242520


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Time Schedule for project activities

The diagram above is the time scheduled for project activities in a network. It shows the

dependencies and the duration for each activity with the early start, early finish, late start and late

finish times.

The critical path for this network is A, C, F, I, J, K, L and M because this path has the least slack in

common. This means that any of the activities in this path were to be delayed there would be a

delay in the overall project with the same amount of time.

There is a lot of free slack in this project in the activities such as B, E and H where a delay in these

activities would not affect the rest of the project as these activities have shorter duration as

compared to the critical activities.


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Costed strategy to shorten the project duration by 20%

Initial project duration = 125

20% reduction in the project duration = 125 x 20% = 25 days which means that the project should be

reduced by 25 days to an overall 58 days.

First activity to be crashed

Activity C can be crashed by 10 days at a cost of RM300 per day.

Therefore project duration = 125-10= 115 days

The cost would increase by 300 x 10 = RM3000


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Second activity to be crashed

Activity I can be crashed by 5 days at a cost of RM500 per day.


The cost would increase by 500 x 5= 2500

Third activity to be crashed

Activity J can be crashed by 5 day at a cost of RM 1000 per day.


The cost would increase by 1000x 5= RM5000

Fourth activity to be crashed

Activity L can be crashed by 5 days at a cost of RM500 per day.

Therefore project duration = 105-5= 100days

The cost would increase by 500 x 5= RM2500

An reduction in 20% of the total project duration has been achieved by reducing 25 days with an

increased cost of RM13000.

After the reduction of the duration of the critical activities it would cause a change on the slacks of

the other activities where for example activities B, E and H had a slack of 5 but after the 20%

reduction the slack has increased to 20. Whereas the activities D and G has a reduced slack from 10to 5.


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Quality management and quality control systems

Quality management system

The Tesco e-tailing system should have an effective quality management system (QMS)

which could coordinate activities to direct and control the project in order to continually

improve the effectiveness and efficiency of the project. It is important to have a QMS where

it can find the defects of the project while it is being implemented rather than having them

detected once the project completed. As per Tamimi, Rajan and Sebastianelli (2003) there

are four phases that describes the entire shopping experience in an e-marketplace. The first

phase is the sites home page which is the initial point of entry for the customer. The second

is the selection of products from the e-catalogue. The third involves completing an online

order form with the customer information. Last phase is the customer service and support

that shapes the overall online shopping experience. With the development of new software

design tools, e-service designers have the opportunity to use the developed tools and

software to design an e-retail market place. Use of these tools would lead to providing a

better serviced website for the customers which would increase the value and customer

satisfaction (Field, Heim & Sinha, 2004). According to Lin (2007) customer satisfaction plays

an important role for long-term welfare of the online retailer. E-satisfaction is a measure of

satisfaction with Internet shopping, and it was found that customer perceptions of

convenience, merchandising, website design and financial security plays an important role

in achieving e-satisfaction. With the development of new software design tools, e-service

designers have the opportunity to use the developed tools and software to design an e-

retail market place.

Audits must be carried out to make sure that the project is in line with the quality

management systems requirements. Therefore it is important for the leaders in the project

team to implement the QMS by making the other team members aware of customer needs

and providing the necessary training and experience.


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Quality control system

The project would be using the Total Control Methodology (TCM) model to control the

quality of the project. There are many elements in the TCM such as control charts and set-

up check lists. An PosiTrol plan involves giving an overview as the control chart and the

PosiTrol log and set-up checklist are the most common on-line quality tools to prevent

and detection of any lack of quality systems. The Out-of-Control action plan (OCAP) would

help the project team in correcting the out-of-control conditions. It is the project team

members to maintain the TCM framework in the project. They need to classify the quality

tools according to actions during the project. They also need to analyse the quality tools and

fitted into the model as appropriately as possible. The quality tools need to bundeled to

each activity such for designing the website the project team can employ the PosiTrol and

the online checklist. There are three levels which the quality tools lie on which are online

quality review, offline quality review and driving forces for quality review. A flow chart is

shown below to better understand the process of the TCM model (Kwok & Tummala, 1998).


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Kwok & Tummala, (1998)


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Measure to ensure superior team performance

In order to gain superior team performance, the project manager of the implementation of

e-retailing in Tesco undertook a number of activities before and throughout the project until

its completion. These measures are as such:-

Recruiting project membersIt is essential for the project and the organisation to have a team of

employees with greater potential. The recruitment process was based on the

employees ability to work under uncertainty and have strong problem identification

and solving skills. It is essential to have members with a great expertise on the online

business area that would provide their know-how to the project with their ambition,

initiative and energy.

Conducting Project MeetingsThe first project meeting was held with all the recruited team members to

knowledge them about the project objectives, importance, schedule, procedures and

the ground rules . they are given the opportunity to mix with the employees fromdifferent departments whom they would be working for the coming months. They

tasks were divided for each team member to accomplish before the dead line.

Subsequent meetings were held every week to analyse their improvements on the

project and to solve any problems regarding the tasks.

Establishing a Team IdentityThe team members lack the full involvement in the project due to their other

concerns and work in the organisation. Therefore the project manager needs to

establish a unique identity to which the members could attach to. Effective use of

meetings to communicate with the members would help define team membership

and reinforce a collective identity.

Creating a shared visionA shared vision is created to encourage commitment of the team members to

achieve the same goal. The shared vision followed by the project management team


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is to provide a better customer service through greater interactivity using the e-

marketplace. This concept is new to the organisation where the project members are

excited and eager to learn about e-retailing.

Managing project reward systemsThe project members have a monetary reward at the completion of the

project. They are also rewarded by the recommendation given by the project

manager on their competencies which could reward them by a promotion. If all the

members are to finish their work on time in relating to the budget, project manager

is to organise a small celebration by taking them for lunch or for drinks to motivate

them to do better in achieving the project goal.

Decision making processGroup decision making would improve the quality of the important decisions.

Members are free to make decisions on minor matters under their

department. Therefore group decision making is made use when major

matters are to be discussed where input from all the departments are

needed to achieve superior quality. Group input is important in making

decisions on the format of the webpage and implementation of promotional

products. Group input would reduce resistance and secure support for the

decision made which would allow the e-retailing activity to be in superior

quality.

Managing conflict within the project

Conflict is aroused when there is disagreement between the members of theproject team. Functional conflict is encouraged where the project manager

can manage the new ideas coming through it. It is mainly encouraged

through the creation of a shared vision and shared goals. There was some

dysfunctional conflict between the team members. This was managed by the

project manager by listening to both parties and imposing his own solution

and presenting it to the parties. This should be done before it creates

irreconcilable divisions between the team which would affect the

productivity of the team.


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Monitoring and Evaluation System

Monitoring the project

In order to measure and evaluate the progress and performance of the project, a

monitoring system is essential. This system is used to determine what data to be collected

during the project and who, how and when the data is to be collected, analysis and

reporting the current progress. (Gray & Larson, 2008). The quality of the software and

hardware used by the designers should be compared with the project teams specifications.

They need to monitor if the applications are up to date and compatible with the current

organisation technology. The actual duration and costs should be compared to the planned

duration and costs to check whether the project is on time and within the budget.

The data collected by the project team should be reported once in two weeks to the project

manager and the top managers of the organisation. The data should be stored in a database

for later retrieval and for statistical purposes. These stored data would contain information

such as the weekly progress, the current status on the project time and cost and solutions to

solve earlier problems and would help to identify new problems.

Evaluating project performance

Evaluation of the project can be done by setting up a baseline plan, measuring progress and

performance, comparing actual against planned and taking appropriate corrective actions.

(Gary & Larson, 2008). First a baseline plan should be set which provides the elements for

measuring performance. This is established from the information found on the WBS on cost

and duration and data from the network and resource scheduling decisions. Second step is

to measure the performance and progress in a qualitative and quantitative method.

Qualitative measures are used for on-site inspection which is by the use of the web service.

Quantitative measures involves the measurement of time performance and the budget,

whether the critical path is early or on schedule and keeping the project on the budget.

Third step is to compare the plan against the actual by the use of periodic monitoring and

measuring the status of the project. Lastly if there is a significant deviation of the actual

from the planned, corrective action needs to be taken to bring the project back in line with

the original or revised plan.


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Project closure

Expected closure conditions

The conditions for the project closure are expected to be normal, as the project is expected

to completed by the revised planned date. The finishing of the project will be marked by the

opening of the e-market place for Tesco where its consumers can buy products online. The

project was to finish on the 31st

January 2011. The project duration was already reduced

compared to the initial plan of eight months due to the increased man power employed on

the project which helped the team to reduce the duration to 5 months. However the costed

strategy managed to reduce the project time by 25 days where the organisation is able to

capture a greater market with the instant implementation of the online retail industry.

Form of project closure

The project manager is responsible for the closure of the project when nearing the end of its

life cycle. A checklist must be created so that the project team can analyse the tasks done

and nothing has been overlooked. It is also essential to survey the current customer base on

whether the project outcomes meet their satisfaction and to see the areas for future

improvement. The type of project closure involved here is a normal closure where the

project ended completing all its objectives as planned with implementing an e-retailing

service for the consumers.

Finally the team and individual evaluations are needed to be carried out. The team

evaluation can be carried out by the HR department. They need to review the evaluations to

assess the strengths and weaknesses and the areas for future improvement. Then the

project manager is responsible for the appraisal of the individual performance by having

informal sit-down sessions with each of them.


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Potential obstacles to project success and ways of overcoming these

obstacles

The differences of cultural backgrounds lead to a cultural conflicts between the project

team members. The decisions made were negated by some employees who lead to

dysfunctional conflict among the team. The language barrier of some of the outsourced

members were an obstacle for communication between the members and their input on

meetings were low which affected the team decision making. Some of the outsourced

employees were interfered in the designing process by the in-house employees by giving

them negative criticism which would de-motivate the outsourced employees.

In order to manage these obstacles the project team had gatherings and dinner after work

to let the members bond and know about each others cultures. This lead to a greater

understanding of the team members from different cultural backgrounds. Due to the

premature closure of the project, the members who understood different languages were

to help in understanding them in meetings. There was insufficient time to provide English

training for some of the members even though this was pointed out by the HR department.

The project manager made a head for each department involved in the project which

terminated the interference by others and negative criticism received. Therefore it was easy

for the project manager to keep the employees motivated during the project duration.


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Recommendations

Based on the analysis above the project is a feasible project which could be implemented in

a short duration. The main reason for the project is to gain a competitive advantage and to

manager greater markets share in the retail industry. The project is financially feasible and

would give a great return on investment because the e-tailing would increase the sales of

the organisation. Most of the members are within the company which would be an

advantage due to shared values and the organisational environment.

There should be effective communication between the team members and this should bemainly analysed in the recruitment process. There should be adequate transparency

between the team members for an effective team performance. The goals and objectives of

the team should be clear and achievable and having an effective monitoring and control

system would be sufficient to be in line with the planed and estimated duration and budget.


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References

Larson, E.W., & Gray, C.F. (2011). Project Management: the managerial process, (5th

edn.). McGraw-

Hill: New York, NY.

Tamimi, N., Rajan, M., & Sebastianelli, R. (2003). The state of online retailing. Internet Research:Electronic Networking Applications and Policy, 13(3), 146-155.

Field, J.M., Heim, G.R., & Sinha, K.K. (2004). Managing quality in the E-service system: Development

and Application of a process model. Production and operation management, 13(4), 291-306.

Lin, H.F. (2007). The impact of website quality dimensions on customer satisfaction in the B2C e-

commerce context. Total quality management, 18(4), 363-378.

Kwok, K.Y. & Tummala, V.M.R. (1998). A quality control and improvement system based on the total

control Methodology. International journal of Quality & Reliability Management, 15(1), 13-48.

Annonymous (2008). Market Environment factors for Tesco in Malaysia. Retrieved on 22nd

September 2010 fromhttp://ivythesis.typepad.com/term_paper_topics/2010/03/market-

environment-factors-for-tesco-in-malaysia.html
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Perera 21661820 Final Report