The big story in Tesco over the last year has been its ongoing growth and consolidation as a market leader to rival Wal-Mart in the US through increased global expansion. Most recently, that expansion saw it announce it will enter the US market in 2007 with a new ‘Fresh & Easy Neighbourhood Market’ brand based on its local ‘Express’ format. The retailer’s own research found an annual US market worth £310 billion that is also estimated to outstrip UK market turnover growth of around five per cent, at 40 per cent over the next five years.
Group IT director Colin Cobain told CIO 100 the move to the US would consolidate and build on the company’s success at home and in Europe, South-East Asia and China. The IT strategy that underpins such aggressive expansion is based on a common operating model across all countries where business processes and IT are standardised as much as possible.
Notable within this strategy was the deal struck with IT outsourcer Wipro late in 2006 to roll out a Tesco-in-
a-box suite of systems, consisting of a mix of standard ERP packages and custom Tesco applications for cost-effective and efficient store rollouts, while still maintaining some sensitivity to local conditions.
Its preferred application mix consists of Oracle Retek ERP, Teradata data warehousing, Business Objects reporting, PeopleSoft human resources and Oracle financials. More recently, it added a major investment to extend and renew the life of its legacy mainframe store inventory system.
In March 2007, the company invested in mainframe integration software from vendor Micro Focus to extend the use of the retailer’s bespoke merchandising system, used in the UK and Ireland, to other territories. At the time Cobain said extending the life and scope of the system was essential to extend Tesco’s global supply chain fulfilment footprint in other markets.
“In other countries, like Korea and Japan, we have established the bedrock – tills system, back-office, core communications, financials and so on – now we need to go on and build on that with store ordering, space planning and merchandising, for example, to make sure what we’re delivering is constantly innovating to improve the customer offering,” he said.