Tesco has extended an application management and development contract with Steria by three years to 2017.
The contract dates back to 1989, when Tesco signed a contract with Steria-owned Xansa for support for its main IT systems used to deliver stock into stores, including payroll, pricing, product, stock replenishment and distribution systems.
While the contract extension value was not disclosed, when Tesco renewed the contract with Xansa in 2007 for three years, it was worth £18 million.
“We view Steria’s staff as an extension of our team, as they work so closely with our employees on a day-to-day basis,” said Chris Evans, head of Tesco’s marketing IT team, previously in charge of supply chain and distribution at the retailer.
“We look forward to continuing to work closely together in future to deliver further improvements that help Tesco to stay at the forefront of retail in the UK.”
In the original and extended contracts, Xansa staff in the UK and India provided the application support to Tesco. This offshoring approach is expected to continue in the latest extension.
The UK's largest supermarket is looking for ways to reverse its fortunes after reporting a significant profit fall earlier this year.
To this end, it recently opened an innovation lab to explore new wearable technology like Google Glass and the Samsung Galaxy smart watch.