News: Back offices in India put retail chains up front
(TNN 15/05/2006) Bangalore - Many Tesco retail outlets in the UK have a unique queue management system. It senses the thermal radiation in the queue at the tills and at entry points. Simply put, this lets the retailer know whether to open new lines to handle longer queues or close some in case there are fewer people.
This software was developed by Tesco’s Bangalore-based back office — Hindustan Service Centre. In many ways, this marks the scaling up of the retailer’s back-office operations in India. It is now set to move more applications and close some of the functions in the UK, as also increase the headcount in Bangalore from 1,300 to 2,000 by the year-end.
The $55-bn Tesco is not the only one scaling up operations in India. The $46bn US-based retailer Target is also ramping up its nascent captive operations in Bangalore. So far, it has engaged third-party vendors like TCS, Infosys and Wipro for maintenance tasks.
Now, it plans to ramp up its 180-strong facility there and reduce work sent to third-party players. Sources said, about 3,000 staff with third-party vendors are working on Target’s tasks. Industry watchers say other retailers like Home Depot, Kroger, Costco and Wal-Mart may also farm out and ramp up back-office retail tasks to India.
This not only helps them shave off 35-45% of their processing costs but will help them cut time-to-market when they do set up shop in India. Says Eugene Kublanov, VP, neoIT, (a consultancy), “Retail offshoring for both IT services and BPO, is set to boom.
Retailers are coming here not only to save costs but also to do some ground work prior to the local market opening up. For retailers like Tesco and Target it’s not just a cost-saving strategy, but also an opportunity to study the local market and engage with local resources.”
In case of Tesco, many of the tasks that it supports out of Bangalore for global operations are no longer done elsewhere. These include functions like fixed asset accounting, payroll for its 250,000 staff and about $30bn worth of payments to suppliers.
It has invested around $40m in India till date. Tesco’s Hindustan Service Center in Bangalore has developed an integrated suite of applications called ‘Tesco in a Box’ which is shipped to any country where Tesco opens a new store, like it did recently in Turkey.
Also, the Bangalore centre will support the British retailer’s US operations, to debut with seven outlets in ‘07.
Says Meena Ganesh, CEO, Tesco Hindustan Service Centre, “The India operations are core to Tesco globally. Some of the functions within applications development, support and financial processing are no longer done in the UK. Now, we are moving pensions administration, store planning and stores helpdesk to India.” However. she refused to comment on the retailer’s plans for India.
So whenever FDI is allowed in retail, majors like Tesco and Target could have a head start.
This software was developed by Tesco’s Bangalore-based back office — Hindustan Service Centre. In many ways, this marks the scaling up of the retailer’s back-office operations in India. It is now set to move more applications and close some of the functions in the UK, as also increase the headcount in Bangalore from 1,300 to 2,000 by the year-end.
The $55-bn Tesco is not the only one scaling up operations in India. The $46bn US-based retailer Target is also ramping up its nascent captive operations in Bangalore. So far, it has engaged third-party vendors like TCS, Infosys and Wipro for maintenance tasks.
Now, it plans to ramp up its 180-strong facility there and reduce work sent to third-party players. Sources said, about 3,000 staff with third-party vendors are working on Target’s tasks. Industry watchers say other retailers like Home Depot, Kroger, Costco and Wal-Mart may also farm out and ramp up back-office retail tasks to India.
This not only helps them shave off 35-45% of their processing costs but will help them cut time-to-market when they do set up shop in India. Says Eugene Kublanov, VP, neoIT, (a consultancy), “Retail offshoring for both IT services and BPO, is set to boom.
Retailers are coming here not only to save costs but also to do some ground work prior to the local market opening up. For retailers like Tesco and Target it’s not just a cost-saving strategy, but also an opportunity to study the local market and engage with local resources.”
In case of Tesco, many of the tasks that it supports out of Bangalore for global operations are no longer done elsewhere. These include functions like fixed asset accounting, payroll for its 250,000 staff and about $30bn worth of payments to suppliers.
It has invested around $40m in India till date. Tesco’s Hindustan Service Center in Bangalore has developed an integrated suite of applications called ‘Tesco in a Box’ which is shipped to any country where Tesco opens a new store, like it did recently in Turkey.
Also, the Bangalore centre will support the British retailer’s US operations, to debut with seven outlets in ‘07.
Says Meena Ganesh, CEO, Tesco Hindustan Service Centre, “The India operations are core to Tesco globally. Some of the functions within applications development, support and financial processing are no longer done in the UK. Now, we are moving pensions administration, store planning and stores helpdesk to India.” However. she refused to comment on the retailer’s plans for India.
So whenever FDI is allowed in retail, majors like Tesco and Target could have a head start.
posted by InCar Group Press Room at 14:14
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