The Hindu Business Line : IT, business services spend — UK's Tesco saves 30% by outsourcing to Indian arm

TESCO, the £37-billion UK-based retail company, gets 30-40 per cent cost reduction in technology and business services by outsourcing from its Indian global services arm, Tesco Hindustan Service Centre (Tesco HSC), according to Ms Meena Ganesh, CEO, Tesco HSC.

However, she declined to specify the total IT budget.

The world's third largest retailer has invested £25 million in Tesco HSC, Bangalore. The centre supports existing technologies, pioneers new technologies and provides business services to the parent, she told newspersons.

Tesco HSC, which went live in May 2004, is involved in some of the key Tesco's IT applications, including thermal sensors that monitor the length of the queue in a retail store. The Bangalore centre supports Tesco's core operations, and annually processes £20 billion worth of payments to thousands of suppliers worldwide.

The Indian arm is also involved in payroll processing of Tesco's 2,50,000 global staff, she said.

According to Ms Ganesh, Tesco HSC will increase its staff strength to about 1,000 in the next couple of months from 900. From Chennai, it recruited 46 professionals from various companies and 30 fresh graduates. Tamil Nadu forms 10 per cent of the company's employees' strength.

The Indian arm is also working on an application to design Tesco stores using CAD (computer aided design). The company will recruit professionals with experience in architecture and CAD tools.

Tesco is likely to see 30-40 per cent year-on-year growth in sourcing materials from India. Last year, it sourced materials, including apparels, worth £100 million from India.

The company plans to source other materials such as footwear, utensils, garden equipment and cotton buds, said Ms Ganesh.

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