Tesco has extended its applications management outsourcing contract, in a deal worth £18 million.

The supermarket giant will use the further reduction in the cost of core IT operations anticipated with the three-year deal extension to focus investment on extending its retail offering and improving customer experience.

Xansa will support these productivity improvements through the use of integrated delivery channels in the UK and India, across Tesco’s critical IT systems, which include distribution, stock replenishment, products, pricing, and payroll systems for the UK and Republic of IreIand.

The outsourcing company will provide support and development through its integrated delivery model, from Chennai in India and five UK sites with application management, software development and consultancy services.

“Xansa, as a valued partner, provides us with expertise in applications management, an in depth understanding of our business and commitment to working together to deliver our key outcomes,” said Mike McNamara, UK IT director at Tesco.