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Tata Starbucks expands rapidly with optimal cash flows and 70% lower initial IT costs

Tata Starbucks partnered with TCS to create an innovative IT backbone for Tata Starbucks. This helped Tata Starbucks with optimized cash flows, incur 70 percent lower initial IT capital expenses and achieve rapidly scalable retail rollouts.

 


 

 


Quote:
“Time was our challenge, and TCS did a very good job on delivery, ensuring timely completion. Also, the TCS team leveraged their industry-specific knowledge base to provide us business consulting combined with IT capability – a winning combination.”
- Tata Starbucks, Sumit Zaveri, CFO

The Customer: Tata Starbucks is a recent joint venture between Starbucks Coffee Company, the world’s leading roaster and retailer of specialty coffee, and Tata Global Beverages Limited, the Tata Group’s global beverages business. Starbucks has 19,435 stores in 58 countries, while Tata Global Beverages Limited has an innovative stable of beverage brands. Tata Starbucks, which launched in Mumbai in October 2012, plans to rapidly expand across India.

Business Scenario:
In January 2012, Tata Starbucks announced that it would open India’s first Starbucks coffee store in October 2012 and expand to a 50-plus store chain within a year. Tata Starbucks soon realized that developing IT infrastructure using traditional methods would take longer and cost more than planned. It also needed three other tactical differentiators integrated into its IT systems:

  • Customized Point of Sale (POS) and ERP systems to meet critical timelines
  • Starbucks’ hallmark Drink Builder functionality to stay abreast of the competition
  • Prepaid card program, the Starbucks Gift Card system, to establish itself in the market

TCS’ Solution:
Our consultants worked with Tata Starbucks to understand the business goals and processes and define the IT enablement needed. We decided on an IT roadmap across two broad phases – to meet the first store launch date and long-term IT strategy for three to four years. While deciding the IT capabilities required for the store launch and beyond, we considered the following five dimensions:

  • The customer value chain: A list of IT capabilities that would influence the customer favorably towards Tata Starbucks
  • The retail value chain: A list of IT capabilities that optimized Tata Starbucks’ operations
  • The Tata Starbucks business plan: Tata Starbucks’ projected store rollout plan and geographical spread
  • Business change scenarios: Potential change scenarios that could occur in the near future and the impact on the company’s IT systems
  • The Starbucks global rollout plan: Knowledge from Starbucks’ experience of rollouts in other geographies

TCS’ solution design and implementation have been fine-tuned further:

  • Retail rollout was completed in less than three months. TCS’ consultants redesigned the solution’s POS components, including the Drink Builder, and enabled the desktop capability.
  • We leveraged our POS and ERP system deployment expertise to design and build a Tata Starbucks solution – configured and deployed within four months – that has again met our client’s critical time-to-market objective.
  • Also, when Tata Starbucks decided to partner with an India-based payment technology company for its gift card solution, we integrated the POS system with the partner payment gateway system and executed a successful rollout right from day one.

We realized the urgency of the decision and delivered the project in a focused and time-efficient manner, which was much appreciated by the company. With our solution, the company will be able to smoothly transition to a new location and improve its operating performance, thereby improving profitability.

Key Benefits:
Our consultants worked with the client through the IT strategy definition exercise, while our IT delivery team implemented a roadmap that has provided Tata Starbucks with scalable IT operations aligned with the company’s overall business objectives. This delivered added value to Tata Starbucks in business and IT strategy, tactical planning and operations.

We helped make Tata Starbucks’ maiden store operational on time, within just nine months. The rapid scalable and flexible IT solutions we delivered also enabled our client to open stores at the desired pace.

The client successfully penetrated the market with more than 25 stores in 12 months. Tata Starbucks’ IT operations can now optimize cash flow to maintain over 70 percent reduction in initial IT capital expenses. 

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