The Hindu Business Line : Sold on India

For Tesco PLC, the world's third-largest retail chain operating across various geographies, India has emerged a strategic base for technology innovation. As Tesco forays into hitherto uncharted markets of Turkey, China, Japan, and the biggest retail market, the US, a group of innovators at the Tesco Hindustan Service Centre in India are designing integrated enterprise software (ERP) solutions, providing store design, and even building loyalty programmes, covering, thereby, the lifecycle of retail operations.

The next mandate is to build a loyalty programme that brings in bonding among its millions of customers.

Sridhar Rathnam, Head of IT Services, Tesco Hindustan Service Centre, says Tesco is the only major international retailer to have a fully-owned support-cum-design centre in India. "In a short time (about two years), we have grown to 1,400 people and expect to reach 2,000 by year-end," he says.

According to Rathnam, Tesco HSC provides IT services for the UK, Korea, Thailand, Malaysia, Hungary, Poland and Turkey. It is responsible for rolling out new applications across the company's global operations. The team manages and maintains the IT systems along with the UK team. "We are looking at developing the expertise of our Indian IT team in the retail domain and have skilled manpower with expertise in mainframe technology, .NET and Business Objects intelligence applications, among a host of other areas," he says.

From customising enterprise resource planning (ERP) to delivering a business solution, Tesco HSC has played a lead role for the group's global operations. Everyone at the HSC knows how the work they perform adds value to our customers across the world, whether they support supply chain, replenishment, product layout scheme in stores or front-end functions", he says.

For instance, if a new store is being set up in China, it will be custom-designed here.

Tesco-in-a-Box

Tesco HSC has developed what is referred to as Tesco-in-a-Box, which integrates Retek's retail Enterprise Resource Planning, Oracle's financial ERP, PeopleSoft's human resource ERP, and several custom-built applications. They function seamlessly as if they were from the same box.

These are to be deployed in China, Japan and the US this year. To the package have been added features such as Tesco Link and Plano Gram for store design, says Rathnam. Tesco Link has been developed for Tesco's suppliers, giving them direct access to store-level sales data as well as information on wastage, margin and stock availability.

The system has been tested with suppliers and around 3,500 of the company's suppliers and trading partners will get hooked on to this system by the end of this year, he says. The portal provides both standard and customised reports, giving information about that specific supplier's products at Tesco's UK stores. It serves as a platform for use by all suppliers, no matter how small, he says.

Customer loyalty

One of the key engagements for the group in India is to develop Customer Loyalty programmes that help create bonding. Citing a recent report in The Wall Street Journal, Rathnam says this highlights how Tesco has signed up over 12 million Britons for its ClubCard programme.

"We are in the process of designing similar initiatives for other countries," he says.

Third-party provider?

Now that the retail market is set to boom, will Tesco look at tapping this market, offering its retail solutions expertise as a third-party provider?

"Tesco has expertise to offer these solutions. However, the focus is only on its internal requirements. With Tesco poised to enter China, Japan, Turkey and the US, we have our hands always full. Since the entire Tesco-in-a-Box is to be rolled out from here, and requires continuous replenishments, we cannot just think about anything else," says Rathnam.

vrishi@thehindu.co.in

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