Rajesh Gopinathan, CEO of India's Tata Consultancy Services. Photo: AFP

India’s leading software services company Tata Consultancy Services (TCS) has won a US$1.5 billion deal from US pharma retailer Walgreens Boots Alliance to fast-track digitization and drive efficiencies.

This is the largest deal for the Indian IT behemoth in the retail space.

The US retailer has been a customer of TCS for a decade and the new deal is an expansion of its strategic partnership. It will be spread over 10 years and TCS will modernize applications and cloud-enable the technology operations of the pharma retailer.

Walgreens Boots is aiming to build a scalable, sustainable and globally unified IT operating model. With assistance from TCS, the company will undergo digital transformation, automation of service delivery and innovation.

The Indian firm will take over staff, consolidate vendors and run the entire IT operations of Walgreens Boots. It will launch a new model for IT Run and Operational services, blend artificial intelligence, machine learning and advanced software engineering.

Walgreens Boots has more than 18,750 stores in over 25 countries and in 2018 it launched a program to deliver an annual cost savings of more than $1.5 billion by fiscal 2022. The TCS deal is part of this program. As part of its cost saving drive, Walgreens Boots plans to close some stores in the US and UK.

Walgreens Boots global chief information officer Francesco Tinto said 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.”

For TCS the retail segment witnessed muted growth in the past year and the Walgreens Boots contract is a quantum leap. The company remains upbeat as large traditional retailers were investing in technology to take on pure online retailers. Retail is the second biggest vertical for TCS that contributes more than 15% of revenue.

In November, the banking financial services and insurance unit of TCS had bagged a $2 billion deal with Europe’s largest life and pensions consolidator Phoenix Group.

According to this multi-year IT outsourcing deal, TCS was assigned the task of transforming its Standard Life business, which it acquired in 2018. TCS will upgrade the legacy technology of Standard Life’s pensions and savings operations onto its digital platform. The Indian IT firm will handle nearly 10 million policies of Standard Life.

TCS is part of the salt-to-software conglomerate Tata Group and was established in 1968. At the end of the third quarter of this fiscal year, TCS had an overall headcount of 4,460,675. It added 22,390 employees in the first nine months of this financial year.

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