Tata Starbucks expands rapidly with optimal cash flows and

Tata Starbucks expands rapidly
with optimal cash flows and
70% lower initial IT costs
“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.”
- Sumit Zaveri
CFO, Tata Starbucks
In January 2012, Tata Starbucks Ltd was launched as a new joint
venture between leading coffeehouse chain Starbucks and the
Tata Group's global non-alcoholic beverages business Tata Global
Beverages Ltd (TGBL). While Tata Starbucks' IT systems and
operations were still nascent, ambitious launch and expansion
plans were announced. Tata Starbucks partnered with Tata
Consultancy Services (TCS) to create an innovative IT backbone for
Tata Starbucks. Our solution ensured that Tata Starbucks was able
to open its stores in India in a short time, operate green systems at
optimized cash flows, incur 70 percent lower initial IT capital
expenses, and achieve rapidly scalable retail rollouts.
Tata Starbucks
About the Client
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 Challenge
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.
At that time, Tata Starbucks had yet to identify the
required IT capabilities and set up its IT infrastructure.
The company faced key time-to-market challenges –
quickly building, scaling, and deploying IT systems to
adequately support operations and cash flow, while
investing capital and other resources judiciously.
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
Tata Starbucks contacted the consulting arm of TCS to
help evaluate, identify, select, and define the IT
roadmap, including high-level business process
definition, by virtue of our experience in delivering
similar solutions worldwide. Subsequently, Tata
Starbucks commissioned the design and
implementation of the IT initiatives identified, as well as
the management of the organization’s IT landscape.
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
The TCS and Tata Starbucks teams then jointly finalized
innovative solutions under three categories – IT
infrastructure, IT systems, and IT capabilities – to meet
time-to-market and cash flow objectives:
IT infrastructure: Traditional infrastructure
solutions would not meet the client’s key
challenges. The lead time to acquire infrastructure
components would be longer and the capital
expenditure to own the components and servers
would be higher. The right solution provides
procurement options for the future, as well as the
capacity to mitigate long lead times for acquisition
and setup. We therefore proposed cloud
computing to address both issues and the client’s
computational and network requirements. We
implemented this on a managed hosting platform.
IT systems: POS and ERP systems were crucial for
Tata Starbucks’ system. We designed, implemented,
customized, configured, and deployed these within
four months, as compared to the typical minimum
of six months for an ERP system of comparable
scale. This significantly helped the client meet its
critical time-to-market objective.
Unique IT capabilities: Tata Starbucks’ Drink
Builder and Gift Card apps were two strategic
market differentiators that we incorporated into
our solution. Using an array of hotkeys and
buttons, the Drink Builder – a Starbucks hallmark - allows patrons to customize their drinks, by
choosing from a set of online options. The Tata
Starbucks Gift Card, on the other hand, with its
offers, discounts, and freebies, will go a long way
in establishing the brand in the market and
developing customer loyalty.
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
“This is another great milestone! Thank you for just the
start of what our great companies will do together.”
- Brian Christenson
Director, Starbucks Business Technology – International
Experience certainty
True certainty of success comes from working with a partner you trust to provide
the insight, support and expertise that will propel your business forward. Experiencing
certainty with TCS means you can count on results, partnership and leadership.
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 9 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.
TCS’ solution design and implementation have been
fine-tuned further:
Retail rollout completed in less than three months,
TCS’ consultants have redesigned the solution’s POS
components, including the Drink Builder, and
enabled the desktop capability.
We have 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, improve its operating
performance, and thereby improve profitability.
About TCS' Global Consulting Practice
TCS' Global Consulting Practice (GCP) is a key component in how TCS delivers additional value
to clients. Using our collective industry insight, technology expertise, and consulting know-how,
we partner with enterprises worldwide, to deliver integrated end-to-end IT enabled business
transformation services.
By tapping our worldwide pool of resources – onsite, offshore and near-shore, our high
caliber consultants leverage solution accelerators and practice capabilities, balanced with
our knowledge of local market demands, to enable enterprises to effectively meet their
business goals.
GCP spearheads TCS' consulting capacity with consultants located in North America, United
Kingdom, Europe, Asia Pacific, India, Ibero-America, and Australia.
For more information, contact [email protected]
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About Tata Consultancy Services (TCS)
Tata Consultancy Services is an IT services, consulting and business solutions organization that
delivers real results to global business, ensuring a level of certainty no other firm can match.
TCS offers a consulting-led, integrated portfolio of IT and IT-enabled infrastructure, engineering
and assurance services. This is delivered through its unique Global Network Delivery ModelTM,
recognized as the benchmark of excellence in software development. A part of the Tata Group,
India’s largest industrial conglomerate, TCS has a global footprint and is listed on the National
Stock Exchange and Bombay Stock Exchange in India.
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