Sainsburys Reports Savings Through New IT System

Tue, 21 Nov 2006
 
Get the latest prices, codes, vouchers & deals fortnightly.
Less than a year after terminating their contract with IT source Accenture Sainsburys has reported a considerable reduction in its IT costs.

Earlier in the year the supermarket chain finalised the migration of its IT department and services after terminating its transformation contract with the outsourcer.

Initially Sainsbury’s signed a seven year contract worth £1.7bn in 2000, and then re-negotiated terms three years later to extend the contract until 2010.

Sainsbury’s racked up more than £60 million in costs due to the migration of 470 of its IT staff and services, but company analysts predicted payback in less than two years through annual savings of £40m.

The company’s interim financial results for 2006/07 proved that IT savings were a major factor in its continued financial success.

Darren Shapland, the chief financial officer for the retailer said that overall, it expects to save more than £285m this year and £440m next year.

"It is positive news on IT where the insourcing means we will pay back quicker than we expected to."

Sainsbury’s chief executive Justin King told reporters last year that, "Accenture had provided system reliability and stability for the company, but that the time was right to develop its IT capability in house ."

Once the development had started it wasn’t long before problems started to surface, as it was believed that poor management was put in place to take care of the connection between the IT infrastructure and the customer facing business .

Doubts were also cast on the capability of Sainsbury’s IT systems to support the business .

Link to this page

Copy and Paste the following HTML into your page.