UK supermarket Somerfield has confirmed rumours that was about to outsource the majority of its IT infrastructure overseas, as as reported by cio.co.uk last month.
It has signed a seven-year agreement with Indian outsourcer Tata Consultancy Services (TCS) last week for the provider to take over its IT operational management and planning, including central infrastructure maintenance and IT service delivery to 900 stores and eight distribution depots.
The deal builds on an existing eight-year relationship between TCS and the retailer. And two-thirds of Somerfield IT jobs move overseas as part of the deal, which is estimated to be worth over $100 million (£51m) over its duration.
But TCS said it will be looking to fill a number of UK jobs as a result of this win, which is the largest full services contract for any Indian IT company outside of its domestic market.
Somerfield has been in the midst of a £70-million IT transformation programme to consolidate a variety of legacy operational systems onto an enterprise resource planning (ERP) software backbone for some time now. The programme saw the supermarket replace its point-of-sale systems, make improvements to its supply chain, and deploy a standardised supply-chain depot system.
The outsourcing news also follows news during October of the sale of 45 Kwik Save stores back to the brand’s new owner. Somerfield had bought 102 Kwik Save shops in 2005, while the Kwik Save brand and 171 stores were sold to a new company who continues to trade using the name. Analysts at the time questioned whether the acquisition would destabilise the supermarket’s transformational work.