Tesco HSC: The Technology Engine Of Tesco

Date:   Wednesday , August 01, 2012

Chin Ho, a software engineer in Korea, is walking through the metro station busy having his breakfast. He comes across a poster of grocery items. He picks up his smartphone and scans the bar code and processes something on his phone. And when he reaches home, the order had been delivered. This is how Britain’s largest and world’s third largest retailer Tesco surprises its customers and gains their loyalty. But who is the brain behind such a wonderful technology? Who is driving such innovation for Tesco?

The man behind such profound technology innovations is none other than Sandeep Dhar, the CEO of the global service arm of Tesco, Tesco HSC. Headquartered in Bangalore, India, Tesco Hindustan Service Centre (HSC) initially started as a back-end support centre for the retail giant Tesco’s global operations, but has now moved up the value chain. It is now crafting products that will transform Tesco’s global business, especially developing mobile application that drives online sales. It is the global service arm of Tesco worldwide and functions as the pulse for the Tesco group, providing key business services for its operations globally.

To combat the increasing competition globally in terms of technology, especially mobile, which is offering people the convenient option of mobile payment or shopping and several other things while on the move; Tesco created Tesco HSC as a mobile application lab. And under the thought leadership and guidance of Dhar, the company is developing the latest technologies to serve various purposes of the parent company globally. Tesco HSC develops mobile grocery applications for iPad, iPhone, Android, and has also developed another shopping application for windows mobile as well for the consumers to shop while being mobile, along with all the IT, business and financial services.

From reducing checkout time at the checkout counters to implementing IT applications that support global finance operations, Tesco HSC develops solutions that make the Tesco retail experience much more simple and smooth. "Our team of IT, business and finance professionals are driven by ideas that can rapidly streamline overall functioning for greater customer experience and profitability," says Sandeep Dhar, CEO, Tesco HSC.

The contribution of the center has now aligned to mission-critical business goals of the organization. "The growing international competition of multi-channel commerce has given rise to the electronic channel, and in order to deliver a complete customer experience we need to integrate the channels," says Dhar.

The technology and innovation challenges

"The concept we started initially of selling grocery online was one of Tesco's forte, as it was an innovative and exclusive concept in the whole world," adds Dhar. Initially the customers were provided with the option of placing their order online and also choosing the date of delivery. This concept was modified based on customer feedback, as the customers found it very convenient. In order to reduce this inconvenience, the two-hour slot was introduced that gave the customers the flexibility to choose the delivery date along with the two-hour window during which they want the delivery to happen. The two-hour slot was further reduced to one-hour in order to reduce the inconvenience. The more the time frame was reduced, the more difficult and expensive it got logistically. The reason being, for a full day window one van is needed, for two-hours window 3 vans are needed and one-hour window 5 vans. Complications arrived with the emergence of mobile phone as a channel especially with the rise of Smartphones which has now become a very potent channel. But Dhar came up with innovative technologies to combat this challenge and provide next-gen experience in shopping. The team developed an innovative technology through which the customer will be able to track the vans using a mobile phone.

"This way the mobile phone channel is getting integrated into the shopping experience. Later the customers were given the feasibility of picking the products ordered according to their convenience. This way we integrated the physical challenge with the agent. This makes Tesco a unique company that integrates channels and be leaders in the multi-channel counts," explains Dhar. He further adds, "Tesco's is a first in retail where business processes (and technology) meant for global implementation have been provided for, and sustained out of an India back-office centre." As a result, stores from China to the U.S. use the same technology and process for buying merchandise, billing customers and managing stores.

Business services are a major function of Tesco HSC. The teams in Business services thrive on different challenges that result from Tesco's operations across America, Europe and parts of Asia. The main functionality includes managing operations of the Tesco Retail Chain, along with providing support to the various teams in Stores, Distribution Centres (DCs), Head Office and the Tesco.com business. Business services provide support in diverse areas like customer services, employee payroll and benefits, store security and distribution benefits. The team also supports Tesco Property in the UK in design, feasibility, planning and maintenance of stores. Business services support various areas that include: Customer support services, Distribution support, Employee payroll and benefits, Store security, Property development and support, and Tesco dotcom.

Not only developing technology, but Dhar and his team of 6000 employees contributed in several other ways for bringing Tesco HSC in the wedge of success for them and their parent company. Based upon Tesco's delivery experience, he came up with standard set of processes which they believe should run ideally in Retail Company which is backed by underlying systems that enable these processes. "The process can be divided into different parts of the retailing lifecycle, which in simple terms can be defined as buying phase, moving phase and selling phase. Tesco operating model has systems and processes which govern all these three stages of retailing lifecycle. We have a team here sitting in HSC, which develops, enhances and maintains these systems. We also have a team which works with a country that is opening their first Tesco store to implement these systems. As we have the capability of IT and deployment analyst, we help them get live in short time and low cost," adds Dhar.

Data has become an integral part of success for any organization depending on the way it explores, analyses, and uses it. At Tesco HSC, the power of analyzing data is immense. "We have a database warehouse that we run and maintain for Tesco. For example, we are able to monitor the pricing that we have and we are also able to compare them with our competitors. This helps us to take decision on pricing terms on weekly basis," explains Dhar.

Driving innovation and coming up with new and enhanced technology on a daily basis is not an easy task. Dhar gives the credit to yoga, pranayam, and gym that help him keep mental and physical balance. The other unique work that Dhar drives under Tesco HSC is to support its parent company's global expansion is the area of remote infrastructure management, ranging from data bases, servers, networks, operating control and monitors the health of the IT infrastructure in a real time and take corrective action with our state-of-the-art operating centre. The Bangalore center is constantly maintaining, developing and enhancing the various Tesco systems and devices.

In order to make sure that the changes made by Tesco HSC work well, they have developed a Tesco Retail lab which has a model of every device that they have in Tesco. “Before we roll out any changes that we have made, we test on these models and make sure where ever it goes live, there is no negative impact on the market," adds Dhar.

There are lots of developments that Tesco HSC continue to do in the IT development and developing lots of applications for its parent company. "One of the thing that we are busy experimenting since past one year is agile methodology. This methodology is useful as we can break down what could have been a long time project into shorter iterations or shorter cycles whereby we are able to deliver business benefits more often rather than waiting for a long period of time," explains Dhar.

Some of the other works of Tesco HSC in challenging projects that helped create brand value for Tesco are: development of a unique collaborative portal- TescoLink; planning and designing Tesco retail properties; refreshing the Tesco retail shelves; solving queuing issues at Tesco retail counters; development, implementation and support of Operating model; Loyalty Card for Tesco customers; business intelligence solutions for Tesco worldwide; and co-ordinating financial transactions between the retail store and banks.

Challenges from Tesco Point of View

To think like a customer is a big challenge and there is a lot of design that goes into this challenge as the design is driven by the consumer behavior. What differentiates a retailer from the rest is their ability to understand how the consumer behavior will get influenced. The market leaders are those who think like the consumer not those who have the best technology. Best technology can be always bought. But it requires people who will understand consumer behavior and then work with the technologist. Dhar explains, “If this factor is absent within the team, and then no one can deliver a service with superior customer experience."

Leadership Mantra and style of Management

"What is really a key to us in Tesco is the core values that we have. Try harder for the customer than us and treat people the way you wanted to treat them. For us the leadership challenges are aligning people to this core values. And these core values are just competitive differentiator. The environment should be good in order to have more productivity and as a leader I focus on making sure that environment is there and people maximize their potential on their own. There is a fallacy in the thought that people have to be actively led all the time, but if you do so you are narrowing down the possibility of outcome," adds Dhar. His strategy is to continuously meet potential customers, and based on their feedback, fine-tune his product strategy. He also firmly believes that the secret sauce to his and his organization’s success is constant evolution, learning and appreciating viewpoints of people from different cultures and walks of life.

The company was presented with the "Excellence Award" in recognition of its outstanding contribution to the country’s industrial development. Dhar firmly believes in leaving the planet greener for future generations, and reducing the carbon footprint. This led the company to win the "Best Green Garden Campus Award".