by Beth Bacheldor

‘America’s Neighborhood Grocer’ Offshores IT to India

Sep 23, 2010
Enterprise Applications

SuperValu has signed a multi-year outsourcing deal with TCS, but there’s more to the story.

All the uproar about offshoring, and yet another U.S. company has signed a multi-year services agreement with Tata Consultancy Services (TCS) in India. Now you don’t get much more than America and Apple Pie than SuperValu, which started as a dry goods wholesaler in Minneapolis, St. Paul and is now a $38 billion company with 154,000 employees and about 4,300 stores throughout the country. SuperValue, by the way, brands itself as “America’s Neighborhood Grocer.”

Interestingly, it appears this partnership with TCS is borne out of a sales deal… the outsourcing gig is the result of Supervalu selling its offshore captive center, Supervalu India to TCS (the sale includes the transferal of more than 600 Supervalu India associates to TCS).

According to the grocery retailer, Supervalu India was formed in 2007 and provides a variety of IT infrastructure, applications and business and corporate services for the company. The sale of to TCS is expected to be completed by October 2010.

Neither company released specific details or dollar figures. But TCS says the engagement “will drive operational efficiencies for the firm through integration of IT, BPO and infrastructure services.” For its part, Supervalu says the new contract will help it improve operations and free up money that can be invested in customer offerings and service. “It will also allow us to move more quickly toward business solutions,” Wayne Shurts, Supervalu’s CIO, said in a prepared statement.

So readers, what do you all think? On the one hand, it’s an example of an American company offshoring IT work to India. But in this case, said company was, more or less, already doing that with its own offshore captive center for at least three years. This new deal won’t seemingly cost any jobs, and Supervalu expects to improve operations and save money… which in the end means a stronger, healthier American company working to succeed in these trying economic times. I’m on the fence, but as always, want to hear your thoughts.