This is not just cost-cutting, this is M&S cost-cutting
Middle-class nirvana Marks & Spencer – the British purveyor of classy date-night grub and frumpy clothes – is slashing its tech supplier base and sending 250 staff to Tata Consultancy Services under an IT outsourcing accord.
The High Street giant will pay a one-time “implementation cost” of £25m to offload delivery and management of certain functions to the Indian firm but reckoned the deal will let it eke out savings of £150m over five years.
TCS will become M&S’s “principal technology” supplier, replacing agreements including those with Fujitsu and Sapient. The outsourcing business will also try to identify areas of inefficiency at M&S and create a “new Technology Operating Model”, which sounds more than a little nebulous.
Previously, Fujitsu had managed on-site IT support for M&S, and Sapient helped managed its online platform.
M&S, like many retailers, runs a hybrid IT function with applications deemed suitable, sent to the cloud i.e. someone else’s data centre.
A spokeswoman at the company told El Reg that TCS will oversee the point-of-sale tech, web platform, management of tech infrastructure and projects, and oversee relations with specialist suppliers.
The retailer confirmed 250 M&S techies will be TUPE’d to TCS – meaning those roles can’t be sent to India… yet. It said individual conversations will take place with around 30 of those individuals “whose functions will be carried out differently in the future”.
M&S revealed it will retain a smaller, “more technical and commercially focused team” of 170 staff.
A TUPE information and consultation process will commence with BIG, M&S’s employee representative group, on January 16.
In its last half-year results ended November 2017, the retailer managed to stem its previous losses. M&S quadrupled its pre-tax profits to £118m on £5.1bn revenue, 2.6 per cent. However, some analysts are predicting a disappointing Christmas for the retailer, with declining sales in its clothing and homeware lines. ®