Tesco standardises IT for global expansion

Retailer to centralise IT development across stores worldwide

Tesco is standardising its business processes and IT systems to support plans for global expansion. The move is designed to give Tesco a single way of working across 3,263 stores in 14 countries.

The programme will involve Tesco standardising each IT system used to trade with customers and run its stores. These are expected to include trading, warehousing, distribution, payroll, financial and in-store systems.

"Few areas are as important to us as IT, and in expanding internationally, it is important that we are able to transfer this capability," said Tesco chief executive Terry Leahy last week. "We are looking to leverage IT to support our common operating model."

The roll-out, which is believed to be the world's largest business process management project, should allow the retailer to cut costs and simplify its IT systems by dispensing with national IT departments in favour of central IT development.

Tesco will also benefit from better quality data, which will help it manage each country's operations effectively and understand more about its customers, said analysts.

"The scale at which Tesco is introducing standardised business processes is unique," said Gartner vice-president of research Janelle Hill. "It could result in a dramatic simplification from an IT perspective, by removing redundant or duplicate applications."

The project comes two years after Tesco started its Tesco-in-a-Box programme to standardise on an Oracle enterprise resource planning system in every country.

Tesco has split the new programme into nine areas, including distribution and the in-store display of goods. The retailer said it would trial new business processes and systems in two countries before rolling them out worldwide.

The first countries will go live in June, just a few months before Tesco opens its first stores on the west coast of the US - its most significant push into a new market for years.

Once a country has gone live, Tesco will no longer need people to maintain systems specific to that country. The only IT professionals that will support each country's business will be first-line support.

Tesco is building all the systems for the programme at its centre in India. The retailer has been developing standard business processes and selecting systems since March last year.

For example, Tesco's director of international space, range and display, Janet Smith, is working on the project to create standard processes for allocating goods to stores and displaying them.

In Smith's area, the business will standardise on 10 different applications, including four from JDA, with the rest being proprietary systems.


The people running Tesco's global standardisation programme

The programme is being led by Tesco's operations development director John Browett. The supermarket group's CIO Colin Cobain is responsible for developing the systems that have been chosen and from the business David Hobbs is in charge of delivering the standardised processes. Both report to Browett.

Each of the eight or nine different areas of business process standardisation is led by a director from the business and a senior member of the IT team. The IT managers report to Cobain and the directors to Hobbs.

Interview with Tesco CIO Colin Cobain >>

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