HANNAFORD OUTSOURCES IT WORK TO INDIA

MICHAEL GARRY

SCARBOROUGH, Maine -- To support its software development efforts, Hannaford Bros. here is now using the services of 60 programmers from an outsourcing firm based in India.

Bill Homa, chief information officer for Hannaford, told SN that about 80% of the programming work -- essentially code writing -- for internal application development is now handled by Infosys Technologies, an IT services firm based in Bangalore, India, with a U.S. office in Fremont, Calif. Between 10% and 15% of the programmers are based at Hannaford's Maine headquarters, with the rest in India.

The number of offshore programmers working for Hannaford, which has used Infosys for about three years, "changes every week, as projects start and stop," said Homa.

Homa described Hannaford's use of offshore software programmers to SN following his participation last month in a panel discussion at the National Retail Federation's NRFtech conference in San Diego.

Richard Baldyga, vice president, outsourcing solutions, Infosys, noted that about 12% of Infosys' revenues come from retail clients. Homa said the trend is still fairly rare in food retailing.

While offshore programmers cost Hannaford "two-thirds" less to employ than U.S. programmers, Homa said cost was not the reason for Hannaford's decision to outsource programming. "We had a huge backlog of [IT] demand from our users, so we had to find additional programming resources," he said. No Hannaford positions were cut, he noted. The creative development work, which requires supermarket industry knowledge, is still done internally at Hannaford, as are enhancement and maintenance, Homa said. All of the development efforts have been focused on supply chain applications, he added.

Homa praised the quality of the work produced by the offshore programmers.

Homa acknowledged that offshore development is complicated by concerns about terrorism. He said he canceled a trip to India in March due to the Iraq war and now plans to go in January, though a major terrorist incident struck Bombay last week.

But the biggest concern, he said, is maintaining control over proprietary business knowledge. "We could do more outsourcing but we don't want to give up [business knowledge]."