Future to revamp IT, puts in Rs 400 cr

The retail giant is in talks with Cisco and IBM to outsource IT operations.

Future Group, the Rs 2,000-crore Indian retail giant, is set to invest close to Rs 400 crore over a period of three years to revamp its IT infrastructure, and is in talks with Cisco and IBM to outsource its IT operations.

While Cisco will be creating a wireless environment for the retail giant, IBM will be responsible for all the applications development (such as enterprise resource planning and supply chain management modules) and architecture-designing (the IT backbone) work. The group is in the process of charting out service level agreements with both the companies.

An official close to the development told Business Standard, "Instead of giving the contract to a single company, we thought a consortium could be made wherein the best technology can be used. These companies will use the best in technology rather than restrict themselves to what they offer."

The retail giant will need the technology as it plans to invest about Rs 4,000 crore over the next one year to expand its different retail chains as a part of its future strategy. It also plans to set up 12 malls under the Central and Brand Factory formats in locations such as Gurgaon, Kolkata and Chennai. Moreover, Pantaloon Retail, which has 340 stores in 40 cities, plans to increase it more than 10-fold by 2011 to 3,500 stores in 90 cities.

One of the biggest problem the domestic retailers face today is how to reduce the check-out time for customers. This has been a key area of concern for the retail giant. "We want to chart an efficient system to revamp the entire billing experience," said the official. Towards this end, Chairman Kishore Biyani wants a wireless infrastructure or a multi-technology platform that can actually track each customer walking in and out of the store, without having to spend long hours in a queue.

The company is not new to technology. Pantaloon was one of the earliest retail companies to have started a pilot for using radio frequency identification technology tags. Some of its retail outlets also experimented with handheld scanner for quick check-out time. Currently, more than 22 outlets use handheld scanners. It has close to 350 IT people.

According to the source, many of the IT officials will be given business roles, and some of the team will continue to maintain the IT systems in-house. When contacted, a Cisco spokesperson said, "The retail industry is a huge focus area for Cisco, both in India as well as in the global markets. We have been working very closely with top retail companies globally and this includes India as well. Future group is a key strategic customer for Cisco and we are working with them as a trusted business advisor."