Tesco checks out £18m Xansa contract extension

Tesco has strengthened an existing IT outsourcing agreement with Xansa to the tune of 18 million so that it can continue to focus on its core retail business and customer satisfaction levels in addition to driving down costs.

The two companies have been working together for almost two decades and today's announcement further solidifies that relationship with a three-year contract extension focused on applications management.

Xansa will support a number of Tesco's critical technology functions, spanning distribution, payroll, pricing, products and stock replenishment, using its development expertise in Chennai, India and from five other sites based in the UK.

"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, Tesco's UK IT director.

"We are therefore pleased to be extending our relationship with Xansa for a further three years."

Tesco is no stranger when it comes to IT innovation, among other things boasting great success with its popular Tesco.com brand and more recently with Tesco Direct.

And, just last week, the retail giant signed a deal with online registry MyThings to enable customers purchasing non-food items to add link their goods to a private portfolio where they can find out additional related information such as relevant accessories, downloads, insurance and warranties.

Tesco is also working on an ambitious global project with business software specialist Micro Focus to ensure IT best practice in its supply chain.

The aim is to use the new mainframe-like technology it its Izmir data centre - which powers eight hypermarkets in Turkey - later this year, before the company launches its brand in the US.