Tesco’s India GCC transforms from a basic dashboard to cockpit in last 20 years

Tesco’s India operations have evolved from a back-office support centre into a global technology and artificial intelligence hub that is increasingly helping the British retailer make decisions on sales, customer engagement, costs and operations across its nearly 5,000 stores worldwide.The transformation can perhaps best be described as a shift from dashboards to cockpits, from merely presenting large volumes of information to giving decision-makers clear, actionable intelligence on what needs to be done. “Dashboards give a lot of information. A cockpit tells you what to do. Retail is all about execution,’’ said Venkat Raghavan, Group Director, Analytics and AI, Tesco Business Solutions, in an exclusive interview with The Hindu.For a store manager, the difference is significant. Instead of having to sift through multiple reports, Tesco’s AI-enabled systems can flag issues such as rising theft of specific products or declining service levels, and provide the key actions required. “All stores receive this on their devices. Within five minutes they know the key actions they need to take instead of reading multiple reports,’’ Mr. Raghavan said.The Bengaluru centre’s journey mirrors the changing role of India’s global capability centres. Tesco established its Global Capability Centre in the City in 2004, when its mandate was primarily transactional: processing payroll, supplier invoices and run customer contact centre operations for more efficiently at a lower cost.“For the first ten years, the focus was on building trust, ensuring the work was delivered well as it had been done previously. However, over the past six-seven years, the focus has shifted significantly towards building high-end niche capabilities out of Tesco Bengaluru,’’ Mr. Raghavan explained.The emphasis today, he said, is more on value and less on cost. In a low-margin business such as food retail, the objective is not merely to reduce operating expenses but to use technology and analytics to drive sales, improve profitability and optimise cash.Bengaluru has consequently emerged as Tesco’s single largest software engineering hub globally and also its largest Analytics and AI hub. The India operation has around 4,000-5,000 employees, with engineering and Tesco Business Solutions teams accounting for roughly 2,500 people each. The centre also plays a significant role in Tesco’s global operations by processing payroll worth around £5.5-6 billion annually for the retailer’s 340,000 employees worldwide.Addressing the need of the`segment of one’ through hyper-localisationOne of the most significant areas where Bengaluru is influencing Tesco’s global retail strategy is hyper-personalisation. ``Much of the thinking behind applying AI to create what we call a ‘segment of one’ came from India,’’ Mr. Raghavan said.Retailers traditionally grouped customers into broad segments. AI is now allowing Tesco to personalise engagement at an individual level by understanding customers’ preferences, life stages and shopping journeys. Last year, the team developed several AI algorithms that helped deliver around 670 million personalised offers to approximately 14-15 million customers of Tesco globally. The offers are coordinated across the Tesco app, email and website rather than being treated as independent communications.The capability was scaled from around one million customers to about 15 million in roughly four years through experimentation, rapid testing and learning, an approach Mr. Raghavan explained reflected India’s ability to build and scale solutions in a frugal manner.Tesco’s long-running Clubcard loyalty programme provides a vast source of customer insight, enabling the company to understand purchasing habits, price sensitivity and life stages. However, data alone is not the differentiator for Tesco. ``Data is the foundation of everything we do. But data by itself does not create value. Value comes from the algorithms, science, and AI built on top of the data,’’ Mr. Raghavan added.The Bengaluru team connects store, customer, supply-chain, market and competition data and translates it into decisions aimed at driving growth and profitability. The Analytics and AI organisation has now grown to around 300 data scientists and AI specialists globally, with a substantial part of the capability based in India.AI taking position in the core of operationsAccording to him, the AI strategy extends beyond customer offers. Tesco is also using AI to manage costs and improve supply-chain intelligence. For instance; cost intelligence, where AI analyses the components that determine the cost of products: including raw materials, packaging, energy, freight and foreign exchange exposure, and tracks commodity movements to anticipate cost changes. The was also deploying agentic AI across core operational workflows, including invoices processing, payroll automation, customer contact centres and store property management, he said.Tesco operates around 5,000 stores globally, each with complex infrastructure involving refrigeration, HVAC (heating ventilation and air conditioning), plumbing and safety systems. When a store reports a problem, AI can analyse the issue, identify likely root causes and route it to the appropriate vendor, he narrated.“Over the past year we have built hundreds of such AI agents. Each agent supports core operational workflows rather than small utility functions,’’ Mr. Raghavan said. Across several workflows, agentic AI now handles around 50-60% of the effort, with humans managing exceptions. The longer-term ambition is for AI to manage processes end-to-end rather than perform isolated tasks, Mr. Raghavan added.India becomes centre of strategic importance for TescoThe growing importance of Bengaluru is also reflected in the level of engagement from Tesco’s global leadership. “Almost every quarter, we have at least one board director visiting this centre,’’ Mr. Raghavan said. The Chairman of the Board visited recently, while the CEO, CFO and Audit Committee leadership have also engaged with the India team.The shift represents a fundamental change in the way Tesco views its Indian operations. ``India is no longer seen only as a cost or commercial centre. It is seen as a capability centre and as an integral part of the future of Tesco,’’ Mr. Raghavan further added.According to Mr. Raghavan, the transformation is therefore no longer simply about a global retailer outsourcing functions to India. Bengaluru has become a place where Tesco’s technology, analytics and AI capabilities are conceived, developed and deployed globally and therefore the GCC migrating from being just a dashboard to a the cockpit which holds much of the controls of the United Kingdom-headquartered retail giant.