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Decade-old Tesco captive still strong, Business Standard

Tesco Hindustan Service Centre manages about 72-75% of Tesco's global infotech requirements.

British supermarket giant Tesco may have announced its entry into India early this year, but India is not new for the company with almost 7,000 employees managing its information technology requirements out of Bangalore.

Tesco Hindustan Service Centre, which completed a decade of operations in India in March, manages about 72-75 per cent of Tesco’s global infotech requirements. Vinod Bidarkoppa, group director and CIO, Tesco HSC, said, “Tesco HSC is a strategic asset. Technology is the new property for our industry. As we take our stores to the digital platform, technology will be crucial,” he said.

Tesco, with 7,000 stores across 12 countries, started its Bangalore centre like many other multinationals. In the initial phase, Tesco HSC dealt with enterprise processes. Over the past four years, however, Tesco HSC had built the group’s online grocery platform and driven its mobile penetration, Bidarkoppa added. Tesco started rolling out its digital stores two years ago and the last country to come online was Turkey.

"The second phase was about building domain capability and taking on more accountability and the last three-four years has been about operating at the value side of the curve where there is single accountability for engineering world class product and platforms. This has meant building our online grocery platform, driving mobile penetration in markets, building products that not just add to the topline of the company but improve efficiency of system and process that impact bottom line," he added.

The important of Tesco HSC is also evident in the fact that Bidarkoppa has a seat at the table of group executives.

Some of these value creations have been the roll out of Tesco's online stores across 12 countries, launching the mobile platform, introducing services like Click & Collect, and others. The roll out of Tesco's online stores started two years back and the last country to come online was Turkey.

"I think what really matter is how customers perceive our services. “Last Christmas, the number of people who buy general merchandise like grocery and entertainment online went up by 20 per cent. We also added a feature that those who buy online can choose the mode of delivery. Either it's at store at a certain window of time, home delivery with one-house slot," he added.

According to Bidarkoppa, this trend is not a blip in the mind but a significant shift in the way customer is shopping.

Tesco HSC is also different from several other GICs because a lot of ideation for new services is driven from the Bangalore centre. For instance, Tesco implementing search feature called 'personalized intent finder'-which basically types ahead of what you are finding for based on your history of search and likings. "This has given us a significant topline conversion. We have also ideated some of the core operational algorithm, like how can the weight of the tray be optimized. These may seem to be small but they have multiplier effect when implemented right," added Bidarkoppa.

The maturity of players like Tesco to use their captive centres showcase how captives have grown in India. According to industry study, almost 20 per cent of the employment that the services industry creates now comes from GICs.

"Gone are the questions about cost arbitrage. The first curve in retail was what we did in brick & mortar space and second phase is multi-channel model where technology is going to be core. For us tech is core competency and we will not outsource it