Background to Tesco.com adopting ATG e-commerce platform

So many of you have written to me asking me for more information on the news that Tesco.com has picked ATG to provide their e-commerce software platform for our service.

First of all, you can read it here:
http://www.internetretailing.net/news/tesco-picks-atg-for-new-ecommerce-platform

In a brief official announcement, Tesco and ATG have announced that "they have entered into a commercial agreement for ATG to provide Tesco its ecommerce
solutions."
James McNulty, Tesco's head of group IT procurement, comments: "We are pleased to enter into a strategic partnership with ATG that will allow us to use this leading ecommerce solution in Tesco."

So what's going on?

Speaking as a 'founding father' of Tesco.com, for years we have differentiated ourselves from the competition by writing our own e-commerce software that fits in perfectly with our processes. We have no issue with the fact that for years this has work superbly well. We provide a great service to our customers and make a profit, what more can I say?

Competitors have tried to copy us but they have only seen the outside views of our software, such as the web site, the portable trolley computers used by our personal shoppers, and the handheld computer used by our drivers on which you sign for delivery. Their challenges have resulted from not understanding the many special algorithms that run deep below the visible surface that allow our staff to pick, pack and deliver efficiently.

However, recently we had to think about our business. What are we doing? Are we here to provide customers with a convenient home delivery service? Or are we a computer software company?

Completely: we're here to provide customers with a convenient home delivery service. Sure we write great software but wouldn't it be better to concentrate our IT staff on 'making the difference' rather than writing core systems?

ATG have been chosen because they have the e-commerce software that matches our core systems the closest. There were plenty of good competitors but with ATG we realised that we would have to re-develop our systems by the smallest amount and provide huge opportunities for growth and new ideas from our own business and IT staff going forward.

So we're about to lay off our own IT staff? Hands off! We in IT will be focussed on all the main business ideas that will make the difference. With the core already there, we can devote our people to designing and developing the 100+ pages of new business improvements and ideas that we want to pursue. For goodness sake, I am running 14 projects this year in R&D mode alone, let alone all the others that need developing!

If you think we've been successful when we've been writing core systems, imagine what we can do when we're freed from that job!

So where does Microsoft still fit in? As you may be aware our core systems have been written in Microsoft's .Net platform and we've have moved forward so very far this way. Microsoft will still continue to be our chosen partner for all the great experiences we are bringing - and wish to bring - the customer. They are fully aware of our decision and remain excited about the way we wish to use their technologies to provide a step-change in the customer experience (as I have illustrated in previous blog entries).

I'm also happy to say that excitement has come from many of our own developers - freed from the (shall I say) 'boring' core stuff, they will be able to concentrate on doing much more tech development to help customers and staff - and do it far more quickly. Yes I'll say it: once the ATG core is in place, our staff can do the 'sexy' stuff.


Update:
The has been some great analysis around this decision, by Richard Veryard of CBDI Forum.
take a look at:
http://rvsoapbox.blogspot.com/2009/03/tesco-outsources-core-ecommerce.html