The Journey Towards Building the Next Generation Business Services

Sumit Mitra, CEO of Tesco Business Services & Tesco, India, reflects on the organisation’s journey towards becoming the Top 20 most admired GBSs in the world for 5 years in a row

Professor Adam Tickell, Vice Chancellor & Principal, University of Birmingham and Sumit Mitra, CEO, Tesco Business Services & Tesco Bengaluru exchanging the Memorandum of Understanding (MoU) between Tesco Bengaluru and the University of Birmingham.

1. Can you give us a glimpse of the journey that Tesco Business Services has had in the last few years?
Tesco was one of the early adopters in terms of leveraging India as a shared services location of choice. In 2004, it opened its operations in Bengaluru, India, where some of the key processes like Finance and Payroll were transitioned to create labour arbitrage benefits for the Group. In 2017, the Group took a decision to leverage more out of India and create a global Business Services organisation to help transform its business model. I had the privilege of leading Tesco through this journey and laying the foundation. Our first two-year strategy, Vision 2020, was about that. For a bullet train to go fast, we first need to build the tracks. These were “culture” and “process.” We devised the “service model” framework, which refined 100s of Tesco processes into 10 key processes, forming the bedrock and simplifying how we work. We defined end-to-end accountability with clear handoffs, with Tesco Business Services taking accountability for the performance. No more “watermelon” metrices where the GBS is green, and the business is red. Our next focus was culture and we needed to build a culture that was ready to adopt and adapt to the change.

Being global was critical at this juncture. By leveraging the right culture and service model framework, we expanded our operations in Budapest, Waterford, and Dundee to support our customers, colleagues, and suppliers across all markets. The second chapter of our strategy, Mission ’23, was all about digital enablement and leveraging data. We built a foundation of continuous improvement upon which we drove the digitalisation strategy, which looked at automating our end-to-end processes. Starting with leveraging cognitive automation to take away rule and task-based processes to leveraging AI and ML to drive intelligent automation, thereby creating value. Data being the new oil, it was logical for us to trap, harness, secure, and leverage data to help deliver insights to create value for the business. It’s been an evolution rather than a revolution in the last 4 years or so.

2. You have been ranked among the top 20 most admired GBS in the world 5 years in a row. What gives Tesco Business Services an edge over its competitors?
COVID-19 has been an inflection point for organisations globally. We have been on a journey of creating differential value for the last few years, and for us “having a seat at the table,” gave us the edge to influence decision-making.. As an organisation, we have been driving the concept of owning end-to-end with an ability to think and behave as “one office.” The focus is never on labour arbitrage or efficiency like a traditional GBS but primarily on how much we can contribute to increasing Tesco’s profits and revenue and improving cash generation through a culture obsessed with creating value for its customers, shareholders, and communities.
This recognition from SSON is a testament to our unwavering commitment to excellence, unmatched eye for innovation, and an unparallel sense of community. Tesco Business Services is the only GBS in the retail space that sits horizontally across the Group’s retail, bank, and mobile business. We own the group-wide capability for continuous improvement, which helps us connect to our purpose to serve our customers, communities and planet a little better every day. We became the edge that is now transforming the Core of the business and the backbone to feeding nations.

3. What are your future strategies? Where do you want to see TBS in the next few years?
Historically, organisations transferred transactional, repetitive, process-based work to their shared services, which have evolved into today’s Global Business Services (GBS). Their remit has remained as being the backbone of efficiency, driving standardization and cost gains – but for many organisations, they are also the engines of transformation for the entire business.Over the last 4 years, we have built a great foundation. From designing 100% of Tesco stores to managing 70% of Global Finance processes and controls to managing commercial contracts, managing £3.5bn of payroll and Pensioner, managing 8m customer and colleague contacts to managing space, range, display, to supply chain management. This not only gives TBS an end-to-end visibility of Tesco’s key processes and outcomes but also gives access to rich data. The next generation of business services is about unlocking “untapped value” opportunities by breaking down functional silos and looking at processes from an experience lens. For example, rather than managing payroll, it’s about improving colleague experience through all the touch points like recruitment, induction, supporting store maintenance, etc. which cuts across various functions.

Business Services is no longer about executing processes or providing reports; it’s about influencing decision-making, leveraging the insights from data to build a recommendation engine that helps drive decisions at the board level which then ultimately delivers the right outcome.

In summary, Tesco Business Services will continue to focus on the importance of building a global structure rooted in effective collaboration to become Tesco’s innovation and entrepreneurial engine. We will continue to leverage advanced analytics to influence decision-making to strengthen our position as a key player in the drive for business resilience. This is built on a strong foundation of the right culture and its colleagues as brand ambassadors.