Culture is the most important aspect of how you run a GCC: Tesco’s Sumit Mitra

Enter Sumit Mitra. The former BT Group managing director was brought in by the British retailer in 2017 to head Tesco Business Solutions, the technology centre arm. His sole mandate was to drive change. Today, the company has one of its oldest running global capability centres (GCC) in India and employs about 5,500 people at its Whitefield office in Bengaluru.

Dressed in a black Hugo Boss t-shirt, Mitra spoke to Mint over a video call on 20 March about Tesco’s in-house centre and the work his company looks after for the parent firm (Tesco Plc). Even as the retailer mulls giving over soon-to-expire food to shoppers in some of its stores, the back-end team stationed out of Bengaluru and its four other global business centres is the brains behind the management of each of its retail customer-facing stores.

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Tesco runs four other GCCs worldwide, and each centre handles functions ranging from micro and macro management of retail outlets to handling customer invoices, hiring, and managing supplier contracts. The GCCs—in Budapest, Bengaluru, Scotland, and Ireland—employ up to 8,000 people, about 2.3% of its 338,000-strong workforce. Its India centre is its biggest, employing two-thirds of its entire GCC workforce.

So what are the company’s plans for its business centres that overlook the back-end running of Tesco’s 5,000 stores globally? Here’s what Mitra, chief executive of Tesco Business Solutions, told Mint. Edited excerpts:

What have been some of the defining trends of Tesco’s GCC in India?

I always say culture is the most important aspect of how you run a GCC or GBS (global business services). We changed the name from Tesco Hindustan Service Centre to Tesco Business Solutions, so that people feel it’s a global business and that it’s supporting our global business. I told the then chief executive (Dave Lewis) that we are going to build a GBS, and it is going to be a step change. We created a service model framework that sought to streamline 700 Tesco processes to 10. Our idea was to get into the architecture of those processes. Those processes are how we serve our customers, how we do our strategy, how we manage our colleagues, how we build our technology stack, and how we manage our accounting.

Like this, we had 10 processes, and I was very clear about what would sit within those processes in a GBS model versus what should sit in the market. I took it to the board for approval, and then we moved on from there. Then covid-19 happened in 2020. We quadrupled our volumes. As you can imagine, being a food retailer, people were at home, which meant that they would eat more, and Bengaluru played a pivotal part in ensuring that we feed the nation that we serve because our contact centre volumes went up by 512%, and we had to hire 50,000 new colleagues.

How has the GCC evolved in the last one year?

Everybody is talking about artificial intelligence (AI). We’ve been working on AI for the last six years. It is almost like people go into a FOMO (fear of missing out) saying, “If we don’t really use AI, we will fall behind. So let’s go and do some test cases.” We have scaled AI, and for me, it’s a FOBO (fear of being obsolete), not a FOMO.

How is Gen AI being used in Tesco’s GCCs?

I’ll give you a simple example. We have a process where customers return products. We get around 295,000 products returned every year into our stores. Initially, we had 25 people in Bengaluru to get those return forms and process them. They would look into the issues, cluster them, map them against the right suppliers, and try to get a refund from those suppliers. What we do now is that we’ve got a whole end-to-end AI tool that manages this process, and then we use some robotics to translate some of the task history.

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We call it ‘AI for operations’ and what that means is it structures the unstructured data. First it picks up the right words, and then it converts it into actionable outcomes that my team needs to do with the support. So that team of 25 is now a team of two, and those two people are managing almost 300,000 returns that we get every year. The impact of that is not the efficiency that we used to do it with 25 people, and now we do it with two. It’s about how quickly and accurately we are able to get back money from the suppliers and improve our working capital. So that’s one example.

The second example is that before, my team would get a lot of queries, and we had to produce a lot of reports. What GenAI has done for us is that we built something called Cockpit 2.0, which actually is a phone-based, web-based app where you can ask it any question, and it will give you standard KPIs (key performance indicators). But if you want to look at a trend, if you want to look at the deviations, if you have to understand a ‘why’, you can ask it any question, and it answers you instantly without any human touch. This is built on our GenAI model that we have built in Bengaluru.

Have global roles transitioned to the GCCs?

This has been happening for years. It’s not about transition, but it’s also about importing and exporting talent. The former chief financial officer (CFO) of Ireland has come from India. The director of group strategy and innovation for the Tesco group came from the shared services space (GCC) at Tesco GBS in the past and worked with us in Bengaluru for many years. It’s also about bringing the right talent from the group into the shared service space. So, for example, the chief human resources officer of Europe now runs our hub in Budapest. It’s an exchange of talent and not a one-way street of what roles can move into GBS, but also what GBS can export into the business.

What are your expansion plans? And I ask this because your parent organization laid off 300-400 employees earlier in January. Are we seeing that kind of a thing trickle down in the GBS centres here?

In the seven-and-a-half years that I’ve been in the business, I’ve stood up on stage and made it very clear that there will not be a single redundancy in India. We will continue to automate, and therefore redundancy is inevitable when you do automation, but we feel as a business, it’s our moral right to help and support colleagues and also help with the skill change.

We will continue to take on new work, and we will continue to upskill ourselves. We will continue to go up the value chain to take on new technology, new work, and we will continue to make disruptive hiring to bring in the right talent at the right cost from the market into our GBS model.

Are you looking at increasing your headcount?

So if I look at India, is there an expansion scope? Yes, we will continue to expand, but at a reasonable rate. We will look at hiring more technologists. We will look at niche skill sets and capabilities like charter surveyors and civil engineers. We will continue to hire while we continue to train our people internally.

It’s no longer about headcount. It’s a skill-count play, that is, the skill and capability that we build. I could go up to 5,500 (employees) or remain at 5,000 as we guide automation. It depends on what capability I am building, what I need to hire from the outside, and what I need to grow from the inside. It is very difficult to pinpoint. Net-net, we might go up by a couple hundred, but the work that we are bringing could be over a thousand people.