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The USD 388 billion retail giant, based in Bentonville in the US, has outsourcing ties with IT vendors like Infosys and has done a recce for developing a captive shared service centre to cater to multiple functions in its worldwide operations. Besides IT development and maintenance, a shared service centre supports different parts of a global enterprise such as HR, finance and accounting.
Sources said WalMart looked at a few potential locations before more or less zeroing in on Bangalore. While a definite call on the captive unit is still pending, WalMart is believed to have scouted for senior tech personnel to take the idea forward. A new address may be added to Bangalores already crowded IT landscape. WalMart, the worlds biggest retailer, is mulling a captive IT/ITeS unit in India’s tech capital, with the potential to create several hundred jobs, sources said.
WalMart is expanding its IT resources globally, including India, to support its growing international business and operations in India. However, we have made no further announcements to that growth. We currently have no plans for a captive development centre in India, a WalMart spokesperson said. WalMarts information systems division is centralised at Bentonville, with a large pool of Indian techies on board. But going forward, the retail behemoth may be looking at developing IT hubs globally to bolster its roundtheclock support services.
In February this year, the retailer said it was expanding IT staffing in India through outsourcing deals with unidentified vendors. The press statement at the time mentioned that WalMart was expanding outsourcing even as it created several hundred new jobs in Northwest Arkansas in the US. Some observers said WalMart may firm up plans only after the US presidential elections later this year as the flight of jobs abroad continues to be a sensitive issue in America. Interestingly, the development comes when there is a raging but inconclusive debate about the longterm viability of captive IT units on concerns of escalating costs.
But several global retailers like Tesco, Target and Supervalu have set up captive support centres in Bangalore in the last 34 years. A source said WalMart may kick off the captive centre with a small operation and may even rope in a dedicated third party vendor to start with a small basket of offerings. But WalMarts global peers have set up their own captives due to the fact that no large Indian IT/ITeS player has the capability to provide end to end services in the dynamic and complex world of retailing.
UKs Tesco, the worlds third largest retailer behind WalMart and Carrefour, set up a captive centre nearly four years ago, and currently employs over 2,700 people. Tesco Hindustan Service Centre caters to the entire IT lifecycle management of the parents global retail operations, besides support businesses and finance services like payroll and pension management as well as store design support. In fact, the Hindustan Service Centre played a crucial supportive role in Tescos recent high profile foray into the US market pitting it against WalMart on the latter’s home turf.
At the same time, Indias outsourcing majors have been deepening their retail vertical offerings, with Infosys counting WalMart and Tesco among its clients while TCS does work for Home Depot. Most frontline IT companies have projected a substantial rampup in their retail vertical, with the rapidlyexpanding domestic retail sector showing huge potential.
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