Shop more and wait less, thanks to HSC Tesco
By Ojas Sharma   |   Thursday, 10 December 2009, 22:18 IST   |    2 Comments
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Shop more and wait less, thanks to HSC Tesco
Shopping in super-markets is great fun till you reach the bill counter, where you end up spending equal amount of time that you have spend in shopping. Imagine, how smooth your shopping experience will be if a heat scanner on ceiling raises an alarm to manager every time there are more than two people in a queue. Manager will then open up more counters to help you pay your bills as soon as possible. This technology is developed by Hindustan Service Centre (HSC), an offshore development center of Tesco, and is already used by all Tesco retail stores worldwide. SiliconIndia caught up with Sandeep Dhar, Managing Director of HSC, who takes us through few of such innovation which are done at HSC to give Tesco an edge over its competitors. SI: What is the purpose of Tesco centre in India? SD: As Tesco was scaling up as a business we felt there is great importance in having a centralized capability for processes, process improvement and IT. The prime idea was capability and not cost. Most companies who come to India, cost seems to be the driver. But if you look at it we have 270,000 people in UK now and we have around 3800 people in India. So cost is not our primary driver here. Our primary driver is capability with English speaking population and the scale that it offers. If you go to any markets in the world, one of these legs will be missing. Because of all these pillars India was chosen as the centre for all these activities. SI: Tell us about something unique on the technology side which has been built in India for the Tesco. SD: One of the things that we have built over here is a retail test lab. It's a 10,000 sq ft lab, and what we have done is, we have setup every device which we may be using anywhere in Tesco. So we have all varieties of tills, hand held terminals, credit card processing terminals. Anything that is used in our distribution centre or stores, we have a specimen of it here. So if we are making any changes to the system we can test it out ourselves before we actually deploy it in the store. So there is huge productivity improvement around price, integrity and stock control. From a customer's point of view, first when you walk into any Tesco store the layout of store is made by people sitting here. We have a team called a property services team, which essentially is a bunch of architects and civil engineers and what they do is they design stores for Tesco sitting in India. You walk in and start looking at the product displayed. So the software which determines what gets stocked where and in what numbers would have been done by us. As you walk by the isle you will see the price label printed on the shelves. Those price labels are printed and filed out of HSC. Once you are done with your shopping you will go to the checkout counter. The entire counter or tills are managed by us. The inventory management system that tracks the goods that have been distributed from the warehouse to the distribution centers, the software that determines the routing of the truck is managed by us. Software in warehouse is also managed by us. So you can't touch upon any part of the Tesco store in which HSC is not involved. SI: What is the major challenge that you find globally for the retail stores? SD: There is a shortage of technologists who understand retailing. The second challenge is constant optimization. Retailing is a simple business but it's not an easy business. What differentiates one retailer from the other is their ability to run business efficiently. Suppliers will give you better price if you give them faster decision or if you can give them more accurate forecast. SI: How can Indian retail sector be more efficient and customer friendly? SD: Customer has spent time shopping and he does not want to waste time in paying the bills. In things like these technology plays a vital part. Every time the check-out clerk is scanning the bar code and the bar code is not in the system, she has to manually type in the bar code. What would have taken half a second is now taking 20 seconds. That's huge. Technology allows you to make these processes more optimized. In India there are huge challenges regarding customer focus. Retail Industry in India is very weak on customer orientation. Customer friendliness in India has to go to next level. It's the mindset which needs to change. Also the number of tills retailers open in India is unbelievable. SI: What are your hiring plans? Is it easy to get an experienced retail professional in India? SD: We generally try to recruit people with good technology background, processing skills or good analytics skills and then we try to make a retailer out of him. So that is something which is going to take some time. We have spent lot of money to make sure people travel to UK more often. We have invested in the Telepresence units. We have two Telepresence units and by next month we will have two more. So we spend lot of money in increasing the interaction. We started this year with 3100 people and we are now at 3800 or so. Probably by the end of year we will have slightly above 4000 people and around 30 percent year on year growth. That's what our prediction for this year is. SI: What edge has HSC been able to provide to Tesco as a retailer against its competitors? SD: We are the only outfit at this scale for any retailer. The range of activities that we cover is huge. Our focus is on creating a business impact and not just headcount growth. We have been running a very big innovation drive over here. Planogram was one, which defines what product is placed in which area of a shelving unit and with which quantity. Then being able to predict when product goes off the shelves, there was a model built around that. There were some models built around our e-commerce business on how to prompt the customer for additional things he may want to buy and he is actually buying something else. So these are some of those things that we have worked on. In a nutshell we have constantly helped Tesco become more efficient as a retailer. Due to recession HSC has grown faster that it did last year. The need for HSC to help Tesco become more efficient has increased. SI: What is the next thing that you are going to concentrate on in HSC? SD: Tesco bank is going to be an initiative we focus on. We have started to do some work with our commercial services team and over the next few years we will definitely be as significant to them as we are for retailing today. However, banking is strongly regulated activity, so some of the things we do for the bank may be done differently, and some we may not be able to do from here.

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