Tesco plans to centralise IT applications across its stores
worldwide, after signing a £100m network and voice contract to
support its
overseas expansion programme.
The retailer, which plans to open 505 international stores by
the end of 2008 will replace 10 separate voice and data networks
with a single network from Cable & Wireless in June.
Nick Folkes, IT director and UK head of infrastructure and
operations at Tesco, said the company plans to use the network to
boost productivity by standardising key finance, human
resources and sales applications across its overseas
operations.
It plans to manage the applications centrally from its IT
service centre in Bangalore, rather than running separate
applications in each country.
"The network will enable us to run IT applications such as
Oracle Financials uniformly across the group within the next three
years. Rather than have every country implement their own instance
of Oracle Financials software, for example, we can start to
centralise and consolidate how we run our finance applications and
processes across the group," said Folkes.
The project is the next step in Tesco's global standardisation
strategy which began five years ago. Tesco plans to centralise its
Oracle Financials software, used for invoicing, its PeopleSoft HR
software, and Terradata Management Information Systems, used for
measuring budgeting targets.
The move would deliver standard reporting functions for the
company, allowing executives to manage Malaysian and Japanese
stores as they would a store in the UK.
"Rather than having a diverse IT estate managed locally in its
own way, the network will enable us to administer IT applications
centrally," said Folkes.
"Our aim is to have a common technology platform in tandem with
common business processes so that we remain competitive as a group
as we continue our expansion abroad. By deploying centralised
purchasing systems and processes into a country, for example, you
immediately make that country more productive."
The network from Cable & Wireless will connect 1,800 Tesco
sites and offer 40 times the existing bandwidth capacity in the UK.
It will connect stores in more than 14 countries and 440,000
employees worldwide.
Initially, the network will allow stories in the UK to use
applications such as voice over IP to save on call costs, and
telepresence to reduce staff travel costs.
Tesco plans to roll out fixed-mobile technology on the network
to let staff to use their existing mobile phone for all calls -
operating as a fixed-line phone in the office, and roaming on to a
mobile network when outside. The service is expected to save Tesco
between £8m and £10m a year in business-to-business call costs over
its current BT Featurenet service.
Tesco will explore the use of the network to deploy in-store
information kiosks - desktops within the store, to direct customers
to items and provide detailed product information.
Tesco has opened 1,173 stores abroad since 2004 in areas
including China and the US, and in the company's
2008 annual report chief executive Terry Leahy said more was to
come.