MUMBAI: Tata Consultancy Services has won a $1.5 billion deal across a ten-year period from US pharma retailer Walgreens Boots Alliance (WBA) to transform its technology operations, making it the largest deal in the retail space for the company.
India’s largest IT firm will take over staff, consolidate vendors, run the entire IT operations of the $ 136.9 billion Walgreen Boots, among the world’s largest retailers. TCS will modernise applications and cloud enable the technology operations for the US retailer, which is an existing customer for over a decade.
The company has committed to cost savings for the retailer during the entirety of the deal period. It will provide managed services like application maintenance and support, infrastructure and security operations.
“The deal marks a pivot in the relationship between Walgreens and TCS and takes us to become their growth and transformation partner. TCS is transforming their whole IT operating model,” Rajashree Ramakrishnan, Chief Marketing Officer, TCS said. Ramakrishnan, who led the Retail vertical till early this month, did not specify the number of people the firm will take over or the number of vendors it would consolidate.
TCS’ has seen bumps in its retail business over the last two quarters but the company was upbeat of the opportunities as large traditional retailers were investing in technology to take on pure online retailers.
Retail is the second biggest vertical for TCS that contributes over 15% of the revenue. The firm has won over $ 18 billion deals from customers in the nine months to September, the company said.
Chief executive Rajesh Gopinathan had said in a post-earnings earlier analyst call in January that Walgreens is the largest transformation contract that the company had won in the retail segment where it is transforming the retailer’s pharma portfolio systems in a modern cloud architecture. The current deal is an extension of the ongoing engagement, according to the company.
The new technology operating model will be a part of Walgreens’ strategy to manage costs better under its ‘Transformational Cost Management Program’.
WBA is building a scalable, sustainable and globally unified lT operating model that is focused on digital transformation, automation of service delivery and innovation,” said Francesco Tinto, senior vice president, global chief information officer, WBA said in a statement. “The TCS strategic partnership will enhance our ability to rapidly address evolving business needs, support large-scale global technology solutions and promote investment in truly differentiating capabilities through a modernized platform.”
Source: Economic Times