Confectionery retailer and manufacturer Thorntons has outsourced
its entire IT operation to EDS, after agreeing a £40m contract with
the IT services giant.
The broad-reaching deal is likely to be a model for company
alliances, according to Robert Morgan, chief executive of sourcing
consultancy Morgan Chambers.
"Strategic alliances such as this, that are under contract, work
far better than partnerships where the companies tend to have
different agendas," he said. "This is the direction deals are going
in."
Under the terms of the 10-year deal, announced this week, EDS will
support the delivery of a number of systems for Thorntons,
including supply chain, forecasting, merchandising and electronic
point of sales.
EDS will also take over support for Thorntons' servers, PC network
and in-store equipment, as well as responsibility for the
retailer's head office telecommunications.
An EDS helpdesk facility will provide IT support to Thorntons'
network of more than 400 outlets across the UK, in addition to its
head office and manufacturing facilities.
Martin Allen, finance director at Thorntons, said EDS will provide
strategic assistance as well as IT services. "This is a key move
for us as we develop the company over the next few years," he said.
"We went with EDS because we will be able to call on the company
for strategic advice, exploiting their expertise in both retail and
manufacturing."
Morgan said a deal of this size was a clear indication that
Thorntons, which has a turnover of £163m, has a strategy for
expansion. "It could use EDS as the weight behind a hostile
acquisition bid for example," he said.
Allen said Thorntons is planning to extend its brand name through
various partners, such as supermarkets and cafes, as well as
increasing the number of stores.
He said the company has changed the role of the operations manager
to supply chain manager, to oversee the issues arising from further
partnerships. In addition, he said, Thorntons has integrated its
manufacturing, purchasing and financials processes into a single
Oracle database, to improve efficiency.