TCS, Marks and Spencer extend partnership amid cutbacks in discretionary IT spends 

Fast fashion retailer Marks and Spencer (M&S) has extended its partnership with Indian IT services company Tata Consultancy Services (TCS) to modernise its core technology stack and drive sustainable growth, TCS announced in a release on Tuesday. Although the company has not disclosed the deal size yet, it was reported earlier this year that it could be anywhere north of $1 billion.

Shankar Narayanan, Global Head of Retail, CPG, Travel and Hospitality Industry Unit at TCS said in a statement after the announcement: “As the long-standing transformation partner of M&S, we are fully vested in their purpose and belief that a simplified organisation with a culture of customer centricity and continuous innovation will help them drive sustainable growth in market share, sales, and profit. We are truly delighted to continue and enhance our relationship with them.”

The company highlighted that the deal would help M&S reduce its technical debt, improve time to market, and enhance scalability. TCS has been partnering with M&S to drive business-critical transformation programs for over a decade now. In the next phase of this partnership, TCS will work towards a cloud-first and composable platform strategy for the fast fashion retailer.

“As we move into the next phase of our transformation to reshape M&S for growth and value creation, we are delighted to extend our partnership with TCS. Together, we pivoted M&S to a digital-first business and achieved key business outcomes such as growing dotcom, driving loyalty through Sparks and realising significant cost and productivity efficiencies. Their industry advisory capabilities will help us accelerate the pace of business transformation by improving time to market; increasing the efficiency and effectiveness of M&S’ operating model; reducing technical debt; and infusing innovation for growth and value creation. This will enable us to achieve our goals of significantly increasing our active app userbase; further growing online sales volume; and building an efficient, resilient supply chain network,” Katie Bickerstaffe, Co-Chief Executive Officer, M&S PLC.

This deal comes at a time where companies across the globe are cutting down on discretionary IT spends, which is also reflected in TCS' Q4 FY 23 results. For the March quarter, the IT services company reported revenue growth of 0.6 per cent in constant currency terms, that was far below the company's own growth projections and was also the slowest since the April-June period of financial year 2021, which is the quarter in which the pandemic hit.

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